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HARMONIC ELLIOTT WAVE

Thursday, April 22, 2010

USDJPY should rally while the Dollar new highs against the EUR & CHF may prove unsustainable

Range trading it was for the most part yesterday and today should start in a similar fashion but I feel there’s a good chance of seen stronger directional moves later in the day.

Covering USDJPY first, the 92.64 level appears to be the key pivotal area. I favor it holding for another new high but not too much above what we’ve seen already. The top of the congestion area around 93.72-84 seems unlikely to be penetrated. Once it gets to that sort of area it is due for a deeper retracement.

This is pretty much in line with what appears to be happening in the Europeans. EURUSD reached the top end of the target range but USDCHF didn’t quite make the low end. It’s a bit touch and go but I feel there’s an odds on chance we could see those targets achieved today. However, once seen we should see the Dollar reverse lower to extend the sideways trading range.

As for poor old GBPUSD... well, after its gallant attempt to push higher it really came to a sticky end yesterday. To be honest it hasn’t broken a bullish structure but if it going to stand any chance of reaching the 1.59-1.61 area then it needs to put on its running shoes pretty quickly. The 1.5474 area seems to be important here and unless that breaks cleanly we could see a pullback into range and possibly a recycling of the entire correction from 1.5192… If not then the rally could be quite solid.

The Aussie’s strength seems to have faced and while this could launch an attempt higher, unless it can rally back above 0.9300-10 it looks like drifting lower again… This could impact on the AUDJPY cross which should continue some choppy sideways moves. GBPJPY and EURJPY certainly appear to have more chance of solid rallies if the EURUSD and GBPUSD can engineer some strength – that really is going to be more a factor of what moves first given USDJPY is expected to decline after an initial rally…

USDCAD… Still bearish but not too far from a solid low – still targeting 0.9830…

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 (+110 pips).

Good luck
Ian Copsey

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

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