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HARMONIC ELLIOTT WAVE

Thursday, April 15, 2010

Potential is there for USDJPY to carry through higher but requires a direct rally soon

There are a few areas to watch for today. Firstly, while USDJPY didn’t really get too far yesterday there remains a prospect if it can forge higher early on today for quite a decent follow-through. It would be worth waiting for that confirmation by a break above yesterday’s high to reach the 94.77 high and probably a little further before a pullback. Indeed, that may even be enough for today but the underlying implication would be for sturdy gains thereafter.

Once of the supporting factors for this rally must also come from the JPY crosses. They are poised and ready for another move higher but we just have to watch for the risk that they could stumble at the last moment and drift back lower into the past day or two’s range. However, as long as we get the right signals from USDJPY then the prospect remains.

The second interesting pair is GBPUSD. It made a new high yesterday and has even topped that this morning. I have had a target of 1.5581 and it still is an important level but, while I feel nervous about making the call, the way this appears to be setting itself up does have a minor chance of even extending as far as 1.5665. It really does depend on whether it drives higher directly or makes a meal out of the rally… However, be aware of the risk.

Now, onto the other two Europeans. They’re struggling a bit aren’t they? There is a chance we could see yesterday’s correction recycle but I do feel at some point we should see follow-through lower in the Dollar. However, I doubt it will break the 1.3814 EURUSD high – or if it does then not by too much. Probably the stronger signal and target is in USDCHF which has potential to break below the 1.0434 low with 1.0370-75 a possible target. Thus match EURUSD with this sort of area.

Finally, AUDUSD still looks firm and is odds-on to break above the 0.9404 high. However, don’t expect it to last for long as a pullback will be due from just above. USDCAD has broken lower and may still see some consolidation but the underlying direction remains lower.

Today’s free analysis is for GBPUSD and can be found on http://www.fx-forecaster.com/DailyForecast.html along with yesterday’s Trader Package Review & Trade Set up report (+40 pips).

Good luck
Ian Copsey

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

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