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HARMONIC ELLIOTT WAVE

Friday, September 25, 2009

JPY crosses and GBPUSD look to remain under pressure

Yesterday was a day I’d prefer to forget – one of those days when pullbacks were deeper than would normally b expected and the breakdown in GBPUSD seemed to spark weakness in all the JPY crosses. This morning has seen 5-10 times bigger than Asia normally sees and it has been a bit hard keeping up with the changes.

If I can derive any common factor in all this it is that the JPY crosses look as if they are going to continue to be under pressure as well as GBP being generally weak for longer. The short term problem we face is just how much in the way of whipsaws are we going to see within the entire mad rush. With movements coming thick and fast it’s going to be difficult to be precise on the support & resistance too…

If there is any pattern better to trade then it will be triangles within the overall trend. These should at least tend to provide quick and relatively safe trades. Be very wary of reversal patterns and err on the side of caution and be aware of which swing highs/lows will break the section of the trend. Flags could well be useful to spot as well.

In USDJPY I am really mixed between whether we’re just seeing an awfully complex corrective pattern or whether we’re still going to see the move lower to 89.39-52 and now the 88.83 target is also being identified in the shorter term price structure.

EURUSD and USDCHF may well be the safer to trade since they are holding well within the overall structure of a shallow pullback. Watch the 1.4540-80 support in EURUSD and the 1.0349-88 area in USDCHF. These do look like relatively calmer trades to look for. AUDUSD looks somewhat calmer also.

Therefore, as we go into the weekend, I’d suggest keeping to the calmer currencies or if you have set ups that confirm patterns at my more key support/resistance then these may be worth a trade but perhaps reduce the trade size to control in this type of frenetic movement.

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 (17 pips).

Have a great weekend.
Ian Copsey

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