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HARMONIC ELLIOTT WAVE

Friday, April 9, 2010

USDJPY still looks strong – while the situation in the Europeans sits between two stones…

I’ll start with USDJPY again as this performed very close to expectations and reached its support. The only issue we have to watch closely here is whether it resumes its rally or falls into a sideways consolidation due to the nature of the pullback to 92.82. I suspect given the length of the correction that the more direct resumption of gains probably holds the sway but we should just be aware of the alternative. However, it should still mean that we see further gains today and from this I can hopefully identify which scenario will develop.

Now, the Europeans… I’m finding this is falling between two stones. First of all I feel USDCHF should ideally see further gains and quite possibly to the 1.0840-44 area. Clearly this would imply losses in EURUSD but we’re pretty close to a break level higher so the 1.3389 resistance is key. If this can cap while USDCHF can remain above 1.0692-13 then I actually prefer the scenario calling for the follow-through. It may cause minor new lows in EURUSD but at this point I don’t think it is going to be sustained.

Over in GBPUSD it has literally reached the resistance I had identified as critical – 1.5303… If it gets above here then we shall probably see a move above the 1.5317 high to attack the 1.5376 major swing high. If this breaks then the larger downtrend is at risk of reversing. I really don’t favor that so we’ll have to observe the key supports that will confirm its expected demise…

In the JPY crosses I had mixed success but overall I am quite bullish here, mainly through the USDJPY view. Of course, given the slight possibility of USDJPY entering a consolidation we have to take care but in particular I can see further highs in GBPJPY – note the comments in GBPUSD – and in EURJPY I feel a correction higher is due. AUDJPY… yes higher but this suffers from the same uncertainty as USDJPY but equally while I am bullish AUDUSD there does appear to be risk of the gains being a little choppy from here. So overall there are a few complications with the variations that can develop in the individual currency pairs versus the crosses so we’re going to need to watch these altogether as a group.

USDCAD… Weird… I’m beginning to tentatively feel we’ve seen the low here much higher than I had anticipated. We’ll have to watch today but if there are further gains then my confidence in this scenario will grow…

Today’s free analysis is for USDCHF and can be found on http://www.fx-forecaster.com/DailyForecast.html along with yesterday'sTrader Package Review & Trade Set up report (+95 pips).

Have a great weekend
Ian Copsey

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

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