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HARMONIC ELLIOTT WAVE

Thursday, August 13, 2009

We do need to take care but the stronger indication is for Dollar losses today

Well yesterday did prove interesting. It didn’t all go my way but it was basically close. Of course, as is often the case the market has stalled in a situation where readings could be taken in both ways, in some cases the alternate scenarios bit having wave relationships that could justify extension in either direction.

Given that Dollar cycles are basically bearish against the European currencies I’ll still prefer this side. However, as I did yesterday, I’ll outline both sides in the analyses which should help in identifying what sort of moves would confirm each direction. It’s not impossible that we’ll end up with a stalemate with the Dollar remaining in trading ranges. I doubt it, but the risk is there.

Either way, once the breaks are made it does suggest quite a persistent move so there should be plenty of pips to collect.

I was encouraged even with USDJPY. It did dip just a bit lower than I had expected but the recovery has been firm and does fit in with the Dollar bullish cycles here. In the larger picture I fancy this moving back to the 101.43 high by around the turn of the month but then another reversal lower. I wouldn’t be surprised to see this rally move through to the 98.87 swing high first and after a correction make the next leg higher…

That should keep the JPY crosses really quite strong. I do find yesterday’s recovery from respective lows a little confusing but I feel we should be concentrating on the upside and look for patterns that imply a break higher. Early on today thought I think we need to exercise some care with this group.

AUDUSD dipped solidly but also recovered equally strongly. This tends to bode well for the bullish view here too – though this also fits in with the general view that once this move is complete we should see a much deeper pullback. USDCAD stalled just below the 1.1083 resistance and I fancy this lower also.

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 (230 pips).

Good luck.
Ian Copsey

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