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HARMONIC ELLIOTT WAVE

Friday, February 5, 2010

While I see further Dollar gains I think they’re limited now…

Oh.

Well, yesterday’s moves were obviously not in the forefront of my mind yesterday. The Dollar downtrend was definitely the underlying risk but the combo-action of both EURUSD declining simultaneously with USDJPY was just spectacular. I had written in the weekly review last weekend that I thought we’d see losses and highlighted the 139.30 area in GBPJPY but I had begun to think it was going to take on a few more twists and turns before reaching this target.

However, now that it has along with AUDJPY finding a low close to its old lows and EURJPY that appears to have ended a move lower also the implication is for a sizeable recovery. I can’t say there are many signals to suggest this but spike bottoms tend to occur without these.

Consequently this has interesting implications for USDJPY and EURUSD… Frankly I think we’re getting to a significant low in EURUSD. I am even considering suggesting it could be a very, very significant low. However, just for now I’ll just concentrate on some levels not too far below yesterday’s lows where I think we could see a reversal.

Now, with the fact that I still see USDJPY lower – down to 86.90-00 approx – this does suggest quite a solid reversal for EURUSD. Indeed, looking at the daily charts the Dollar’s decline has begun to show signs of slowing with mild Dollar bullish divergences in the daily charts. In addition, around the 1.3652 and 1.3576-92 areas we are facing some major projection targets. In USDCHF these are at 1.0727-61 and maximum 1.0820.

It’s Non Farm Payrolls tonight so the potential is there. While it would be very risky anticipating this eventuality it will be useful to have this in your minds…

Today’s free analysis is for GBPJPY and can be found on
http://www.fx-forecaster.com/DailyForecast.html along with yesterday’s Trader Package Review & trade Set up report (+320 pips).

Have a great weekend
Ian Copsey

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

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