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HARMONIC ELLIOTT WAVE

Monday, June 29, 2009

We should move right back into range again today

Friday didn’t see the decline I had expected and without access to my charts over the weekend I had felt that the implication would be for a rally into the 1.4177-1.4212 area. The problem with that scenario is the position in USDCHF. Very much like the call last week when USDCHF found a low at 1.0631 we face a situation that to be honest I’m not that keen on seeing much lower than the 1.0795 seen on Friday. However, equally having gone over EURUSD I can’t say my favored view is for a new high today…

If anything I feel that the rally to Friday’s 1.4117 high looks more corrective than a trending move. It surprised me to find that, but the wave relationships tend to support this more – and actually fits in with the USDCHF position. Given the highly volatile nature of price action over the past few weeks it is a scenario that can’t be ignored at the very least…

I’d like to fit GBPUSD into this framework as well. Here I am less certain but there is a possibility. We shall have to watch this one a little more closely however as GBPUSD is in a different daily pattern compared to the other two. However, overall if there is any guideline to follow then it is in EURUSD which, if my bearishness today is incorrect again, will imply follow-through to 1.4177-1.4212 as has been the alternative for some while.

The Dollar’s weakness on Friday was also reflected in USDJPY. I almost got bearish here but the structure of the decline from 98.87 doesn’t seem quite right to me. The momentum picture hasn’t really confirmed a reversal higher so we’ll have to be a little careful. However, if anything the JPY crosses look more on the soft side but this could (and should) be driven more by the Europeans rather than USDJPY…

All in all, the scenario I am looking at could keep the Dollar in the recent trading range – but move more towards the highs and this does seem to be a common feature of all Dollar-currency pairs – perhaps with the exception of USDCAD. Here I want to be a little careful but I feel the stronger argument is for a rally. However, best wait for confirmations before committing too quickly.

Anyway, if what I have considered is going to occur then the advice must be to take profit when seen and always remember that there has been no break of the corrective wave structures of yet – so only look for a stronger directional move once break out areas have been taken out.

Today’s free analysis is for USDCHF and can be found on
http://www.fx-forecaster.com/DailyForecast.html along with Friday’s trade set ups.

Have a profitable week
Ian Copsey

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