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HARMONIC ELLIOTT WAVE

Tuesday, September 22, 2009

Today’s a day to watch for the first break but don’t expect a fly-away market

What has struck me over the past 24 hours is that the decline in EURUSD appears corrective. Add to this the failure of the Dollar bullish divergences in EURUSD and possibly USDCHF too and I have had to scramble to re-assess the daily chart and the implications…

I don’t think we’re going to see a sustainable move in either direction right now though I do feel that we’ll see the range of trading widen. However, I am in two minds over the next immediate move. In many ways I am more tempted to say that we’ll see the Dollar dip a little further against these two. I can see a barrier at 1.4822-44 EURUSD and at 1.02118-28 USDCHF and I find the prospect of seeing this type of move and the potential reaction in the market quite intriguing as it would force a deeper pullback than the one we have just seen.

The alternative is for the current pullback to extend a little more. This would provide a basis for further losses later. This is probably my second favored scenario…

All this is complicated by GBPUSD which dipped but remained above 1.6113. This also raises some confusion but for now I’ll remain bearish here but will keep a look out over my shoulder. An extension beyond 1.6113-34 would probably only get as far as the 1.5682 corrective low. The alternate outlook if it rallies actually looks much more strongly bullish – in fact to 1.6995 at least… That’s a bit tough to absorb at this point but never say never – this is the Forex market after all…

Finally, USDJPY pushed higher and has exceeded the 92.00-25 area, finding a top yesterday at 92.52. This will mean we found an intermediate (but probably not final) low at 90.12. The first leg higher here looks as if it will retest the 93.29-43 peaks but for the moment that should be enough for a correction lower.

AUDUSD needs to remain below 0.8650-60 to remain bearish while USDCAD needs to remain above 1.0755-70 to remain bullish…

Today’s free analysis is for EURJPY and can be found on
http://www.fx-forecaster.com/DailyForecast.html along with yesterday’s trade set ups (100 pips).

Good luck.
Ian Copsey

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