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HARMONIC ELLIOTT WAVE

Wednesday, August 19, 2009

This could prove to be a choppy day today

Trying to find a way to express my impressions about the market has been rather difficult today. I could make an attempt by saying that there appear to be sub-structures within the main structures that provide a great deal of confusion and uncertainty. I’m not sure that will actually convey my thoughts.

On the one hand I can see that looking at the larger hourly/4 hour charts I can see reasons to suggest that in some cases yesterday’s corrections reached the right sort of level that would still allow the underlying trend to resume. However, digging deeper into the 5 minute charts brings up an array of conflicts and so my so that I do feel we need to approach the market carefully today.

If I am to take any stance then it is that the first reaction today is to see corrections to the moves during new York. Then I feel we need to see where this leads us and wait for breaks. Indeed, in some cases the breaks of the extremes seen in the pullback yesterday would appear to suggest that the larger Dollar down trend will resume. Thus I will attempt to highlight the pivotal areas that would provide the difference between the resumption of Dollar losses and a slight deepening in the recovery. Overall I do have a preference for the Dollar downtrend to resume but the key is establishing just where the cut off in the opposite direction lies.

Even in USDJPY this ambiguity has arisen too. It held the 95.34 resistance well and this tends to bode well for the downside to continue. However, since the high the wave structure has become very strange and I can’t say the downside is nailed on to continue – although it would be my preference.

Of course the other scenario to consider is that the Dollar doesn’t confirm a break in either direction and begins to map out a consolidation pattern. Having introduced this must highlight how confusing the current picture is. Given the market’s complete lack of committing to any direction for any meaningful period is enough to suggest that we should also take this seriously.

Thus, today’s analysis is going to be couched on the defensive side and I would suggest that profits are taken quickly if seen.

Today’s free analysis is for USDCAD and can be found on
http://www.fx-forecaster.com/DailyForecast.html along with yesterday’s trade set ups (97 pips).

Good luck.
Ian Copsey

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