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HARMONIC ELLIOTT WAVE

Tuesday, August 11, 2009

The Dollar should make gains all round today

The Dollar remained underpinned yesterday and there does appear to be potential for the Europeans to be showing a higher level of correlation and I’ll be following a more (Dollar) bullish structure for GBPUSD and USDCHF. I still want to be cautious about these two and will be looking for them to make the right moves over today that demonstrate their unqualified support for the EURUSD led structure.

Indeed, I feel that the small moves we have seen already this morning were probably the lowest we shall see the Dollar over today. Assuming that remains the case then I’ll be looking for quite a solid Dollar rally today – although not in a straight line. Near term barriers are at 1.4060-70 EURUSD, 1.0920-30 USDCHF and 1.6394 GBPUSD and maybe a small risk of 1.6343.

These areas should generate a pullback but not a particularly deep one and then head for the stronger targets at 1.3985 EURUSD, 1.1021-67 USDCHF and 1.6255-65 GBPUSD. From these levels I’ll be looking for a longer lasting correction.

USDJPY was rather lethargic yesterday and is still in the process of a correction lower. I still see this recovering from the 96.60-65 area to renew its rally back to 97.78 initially but then a pullback before it can push higher again. The target here remains around 98.88 at least and may edge above 99.00…

This should keep the JPY crosses fairly subdued and probably retrained into range trading. There does seem some early risk of slippage but if I have any preference then it is for all three to make further headway higher again. However, it may be choppy to begin with until the Dollar rally against the Europeans has completed.

AUDUSD is really bucking the USD trend to a certain extent. It has been dropping but in a very choppy manner and this is more conducive to a corrective pattern and which should find support around 0.8280-00 – at the most 0.8243. USDCAD also seems to be making steady, if erratic gains against it’s U.S. counterpart but I feel today this could be reversed as a correction is due.

Today’s free analysis is for USDJPY and can be found on
http://www.fx-forecaster.com/DailyForecast.html along with yesterday’s trade set ups (25 pips).

Good luck.
Ian Copsey

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