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HARMONIC ELLIOTT WAVE

Wednesday, July 15, 2009

The Yen should strengthen all round today

The decision of whether to be Dollar buyers or sellers required too much commitment from the market and by a whisker EURUSD and USDCHF saw the medium term Dollar bullish structure remain intact. USDCHF rallied relatively well but EURUSD remained subdued and has left the status quo unchanged.

I still face the same problem. We are just two weeks away from what I had considered as the probable timing for the next Dollar high. With targets at 1.2850 EURUSD and 1.1650 USDCHF there has to be some sort of dramatic change in the collective market mind-set to provoke a move of that magnitude. I am also mindful that daily cycles are basically Dollar bearish into the end of August/beginning of September which is where I had considered the end of the triangle should occur.

Either I have got my cycle timings wrong and thus we can still see the rally, then pullback to complete the triangle but at a later date – maybe late September/Early October – or these bearish cycles will generate direct losses from now into the end of August…

The European currencies’ analyses will therefore remain neutral and watching key break levels until we have a more definite signal.

Now, USDJPY looks a lot more interesting. I think there to be a strong chance that this morning’s peak at 93.76 will be the highest we see for a while – or if it breaks then 93.93 is the reserve resistance. Equally, I see the JPY crosses having found their respective highs or perhaps have a final peak to make but overall these look bearish too. How quickly the crosses decline will depend on whether EURUSD and GBPUSD decline today and if so how fast.

Indeed, probably the Japanese Yen (direct or crosses) will provide the best trades today…

AUDUSD seems to have a good chance of capping below 0.8003 while after its fall off a deep cliff USDCAD seems to have the opportunity to recover today.

Today’s free analysis is for USDCHF and can be found on
http://www.fx-forecaster.com/DailyForecast.html along with yesterday’s trade set ups (155 pips).

Good luck.
Ian Copsey

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