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HARMONIC ELLIOTT WAVE

Friday, April 16, 2010

The underlying expectations remain the same but lack of follow-through yesterday opens risk of a messy day

Just as I thought we’d see some decent movement we saw corrections recycling which seem to require just a little more time to complete before the Dollar can extend its losses. It does seem to imply that we’re going to see some short term consolidation, probably some unpleasant choppiness before this all sorts itself out.

The two pairs I had identified yesterday as having greatest potential (USDJPY and GBPUSD) failed miserably the former falling back into one of those whippy triangle-like patterns while GBPUSD, poised with its key to unlock further gains, promptly put it back in its pocket and succumbed to a corrective decline.

Now, on GBPUSD specifically the sharp recovery tends to argue against any drop below yesterday’s low but the way it has pulled back this morning tends to suggest a short term triangle probably lasting for much of today. Even USDJPY looks to have just a little more consolidation left in it, maybe a minor new low below 92.82 but not below 92.56… Once seen the upside can develop. However, take care as a break below 92.56 would risk further losses…

For EURUSD and USDCHF… Well, there’s probably a little more downside left in the former with the 1.3479-89 area the target while the latter has probably seen its high and should remain in a consolidation waiting for EURUSD to finish its decline before the Dollar begins to weaken again…

For AUDUSD I’d like to see this remain above 0.9310 else it could perform a recycling itself – the 0.9204 area then begin the target. USDCAD is exactly the same. A much deeper rally than expected that threatens to move back to the 1.0102-11 area before coming back lower again…

Messy, messy… take care…

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 (+190 pips).

Have a great weekend
Ian Copsey


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

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