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HARMONIC ELLIOTT WAVE

Friday, February 12, 2010

The strong Dollar gains certainly look like the bull trend has resumed… but I’m not convinced yet…

With Monday being President’s Day holiday in the States the next report will be on Tuesday


Whew… it’s been a difficult week. Once again the preferred Dollar bearish stance failed completely as a strong rally hauled it back up to the year’s highs. First thing in the morning I looked at this and thought this would mean follow-through as described yesterday in the alternate scenarios. It did hold those resistance levels quite well.

Then I had a closer study and I’m really not that sure that we will see those gains follow-through. It really is touch and go and the retracements from yesterday’s highs have already reached their maximum limit if the uptrend is to resume. What I can say is that it will be those retracements that make or break the move higher…

If I have any preference I, perhaps perversely – prefer a total reversal and a move to new corrective lows and probably closer to the last major swing lows at 1.0497 USDCHF and 1.4025 EURUSD… However, just to make sure that I’m not being sucked into a contrarian’s view let’s wait for breaks of the retracements…

If I am right then it’s going to raise the odds that we may have just seen a major Dollar high. I have to say though, even then I think we’re going to have to wait for a while yet for this to be confirmed as any test of the 1.0497 and 1.4025 trend breaks aren’t going to happen directly and we’re more likely to settle back into a trading range…

On the other hand… if I am being contrarian for no reason then we’ll see the Dollar break higher today and the 1.3585 EURUSD and 1.0793 USDCHF Dollar highs will (very obviously) the trigger.

However, note that USDCAD has broken down and AUDUSD and AUDJPY have made some solid gains from their lows. I find this quite encouraging though there are some barriers today that need to be overcome to sustain this move. If they occur I’ll be a little less cautiously banging the Dollar bearish drum again…

Today’s free analysis is for EURUSD and can be found on
http://www.fx-forecaster.com/DailyForecast.html along with yesterday’s Trader Package Review & trade Set up report (+245 pips).

Have a great long weekend
Ian Copsey

NEW!! FX-forecaster Trader Package now available at €20.00 pm
For MT4 users

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