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HARMONIC ELLIOTT WAVE

Monday, March 8, 2010

We are at a stage where several corrective structures could develop within the Dollar bullish view

Friday was partly as expected and partly quite different. The low in EURUSD at 1.3533 and the high in USDCHF at 1.0807 were within range of expectations. From these levels we have seen a pullback that may have completed. The problem with this early stage of the renewed bullish thrust is that retracements can be any where between very shallow to even 100%. We could even see an extended correction going sideways.

Therefore the near term vagaries of the different potential alternatives has to be handled with just a bit of care. Personally I’d like to just see direct follow-through higher for the Dollar but I feel the position in GBPUSD together with the duality of USDJPY and its crosses are tending to confuse life somewhat.

The 1.5178 target in GBPUSD has all been met but the way it has rallied does seem to me as if it could extend just a little further – possibly to 1.5206-30. USDJPY also still looks bullish but is probably more likely to have a much quieter day today within a corrective range. However, this does seem to point to a retest of the 92.14 high again by late tomorrow – possibly could extend into Wednesday.

Consequently the JPY crosses also looked buoyed up having reached levels much higher than expected and this does seem to suggest that EURUSD may have problems resuming the downtrend.

Therefore we are back to looking across the entire range of currency pairs to watch for breaks and correlations between key support & resistance levels in the individual currency pairs. It all sounds a bit of a pain but this does appear to be the risk I see…

However, the underlying message is still Dollar bullish still and will only change if last week’s lows are broken.

Today’s free analysis is for AUDJPY and can be found on http://www.fx-forecaster.com/DailyForecast.html along with Friday’s Trader Package Weekly Review & trade Set up report (+85 pips).

Have a profitable week
Ian Copsey

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

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