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HARMONIC ELLIOTT WAVE

Tuesday, March 2, 2010

All being well the Dollar should push to new highs against the Europeans

Yesterday saw some mixed results which can be split into the correct call for the Dollar to resume its uptrend against the Europeans and the lack of follow-through lower in USDJPY which therefore impacted on the JPY crosses.

Of course, the big mover on the day was GBPUSD. While I was bearish the extent of the losses outstripped my more conservative expectations but is in line with the underlying bearish medium term view. There will be further to come also and possibly this could be direct also. I can see two sides of the (Pound) coin here as my first analysis of GBPUSD indicated potential for the correction to deepen but then GBPJPY looks more directly bearish. This may be a factor of USDJPY but the follow-through I have been anticipating to the 88.33 area did not materialize.

However, I do feel that EURUSD and USDCHF should resume their trends and this does seem to point to new Dollar highs, possibly as soon as today but certainly the week should now see extension higher and in line with the medium term targets. It would seem logical to expect GBPUSD to tag along for the ride. Once the Pound comes under pressure it can often be an easy ride with limited corrections. Thus, take care here and always favor the downside…

Just to step back to USDJPY – we have two options as far as I can see – a move above yesterday’s high which would then allow follow-through to 89.80 and maximum 90.02-23 or the original 88.33 target will be seen first before recovering. Having said that, I do still feel there will be a lower target below 88.33 over the course of this week or perhaps next.

On the JPY crosses GBPJPY looks directly bearish while EURJPY and AUDJPY seem to point to marginal new highs before weakness returns to generate new lows. Thus, this highlights the need for some early care while the individual currency pairs develop but with the emphasis on the JPY crosses…

Yesterday’s Trader Package Review & trade Set up report (+85 pips) can be found on http://www.fx-forecaster.com/DailyForecast.html

Good luck
Ian Copsey

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


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