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HARMONIC ELLIOTT WAVE

Thursday, March 25, 2010

Expect a pullback before further Dollar gains

Please note that the report will take the Easter break from Friday 2nd April to Wednesday 7th April


Ah… It wasn’t quite the quiet day I had expected but the market exploded against the majors. Game on. The one central indicator for me is the weekly bearish flag in EURUSD. This suggests another 5 weeks of losses and implied target to around 1.2700… Pullbacks should be relatively limited…

Thus we’re going to have to plan our strategies with a general bullish bias for some while yet but once that target is reached I feel we’ll have found the Dollar high for the year. Well, that’s the current structure I am looking at and we’ll judge from momentum on arrival at the target.

Having said that I don’t think we’ll see any follow-through today. From what I can see we have made an intermediate high in the Dollar. I doubt it will last for more than today or so before the rally resumes so look to find another entry into the bullish trend.

It is worth noting USDJPY also. Uncharacteristically it rallied along with the general Dollar direction. It poked its head just above the 92.27 resistance I had outlined but I think it may be done now. The problem I have here is that the rally was so sharp momentum has been left in a state of shock and remains apparently strong.

However, we have seen what may turn out to be a spike high – therefore watch out for what may be a total reversal over today. This is also supported by the JPY crosses. Here I am longer term bearish and feel that either yesterday’s highs were the final high – or possibly we may just see a small extension today. However, overall, while USDJPY can hold below 92.39-60 I think we’ll be back to the same pattern of strong losses in the crosses…

AUDUSD has dipped again and any rally should be sold into. I feel this could reach closer to the 0.8801 corrective low before turning higher. The equivalent in AUDJPY is a return to the 78.19 corrective low…

So for today, hold off from immediate Dollar buying and pick the right moment to get back in – and possibly favor the JPY crosses as these could well make one of their heart-stopping drops…

Today’s free analysis is for USDJPY and can be found on http://www.fx-forecaster.com/DailyForecast.html along with yesterday’s Trader Package Review & Trade Set up report (+100 pips).

Good luck
Ian Copsey

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

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