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HARMONIC ELLIOTT WAVE

Tuesday, July 28, 2009

Yesterday leaves things hanging in the balance

I had really thought that by now I could point in one direction and feel confident about it. EURUSD did make a new high… just … and this could be seen as having done enough to confirm a high is in place. However, USDCHF did not make a new low and that causes me significant discomfort. If we have seen the Dollar low, then USDCHF is already half way to its target when EURUSD has only just started. I guess it may be possible but it does generate metal gymnastics and basically I tend to shy away from such complex non-correlations firstly because these situations rarely ever play through and secondly because they make my head hurt…

So we’re almost back to where we started yesterday… Are we going to see one more low in the Dollar versus EUR and CHF or have se seen the end of this move? I’ll continue to side with the new low but remember to keep an eye out over my shoulder to watch for any other unstoppable traffic. The break levels are not that far away now so keep an eye on these.

This adds the problem of GBPUSD which peaked nicely in the 1.6515-42 sell zone I offered yesterday but promptly refused to push lower. This needs to break below the 1.6437 low to confirm additional losses but until that point there is still risk of sideways consolidation and possibly even another attempt higher. The 1.6542 corrective high still looks important and we should still observe the 1.6585 high. Only above would cause a stronger push higher.

USDJPY pushed up higher and while 94.80-88 supports I still feel we’ll move up towards 96.04-26. However, that should be it and the next larger move should be lower. That produces its own impact on the JPY crosses which I’d feel more comfortable in seeing a final rally. This is quite possible while the USDJPY target lies at 96.04-26 but a firmer EURUSD would contribute to the effort. However, once these moves are complete the implication is for more losses…

Today’s free analysis is for AUDUSD and can be found on
http://www.fx-forecaster.com/DailyForecast.html along with yesterday’s trade set ups (70 pips).

Good luck.
Ian Copsey

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