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HARMONIC ELLIOTT WAVE

Wednesday, April 14, 2010

Yesterday’s limited moves don’t provide many clues but the Dollar does seem to be edging towards the bearish side…

The market appears to be confused, unable to capitalize on the Dollar weakness but the corrections seen yesterday didn’t get close to testing key resistance levels. It does keep the bias towards further weakness but I remain with the view that any follow-through is unlikely to be that strong and a larger correction will be due.

Still, I cannot rule out at this stage the possibility of the correction higher continuing. The 1.3640 EURUSD peak reached this morning does seem important and in USDCHF there is an equivalent level around 1.0505-15. If these do manage to hold it will favor extension of the larger correction.

Even in GBPUSD the movement seen so far doesn’t really shout out that it wants to extend its gains. There appears to be more risk of consolidation than a stronger directional move. All this does seem to be reflected in the JPY crosses (with the exception of AUDJPY) where we still seemed to be locked in potential triangles. The conclusion can only be that we’re still going to have to suffer another messy day…

Indeed, if there is any stronger chance of a directional move I feel this is in AUDUSD and AUDJPY, both of which appear to be turning back higher and looking to test higher altitudes. Probably the first rally will be limited to around 0.9309-15 but after that I can see a move to above the 0.9404 high – by a small amount at least. This should drag AUDJPY higher and how that performs probably depends just as much on USDJPY. I’d like to believe it has done enough in the correction and that the next leg higher is to occur. A move above the 93.59-77 peaks would open the doors for further gains and if seen AUDJPY could well be a decent winner.

The only other thing to mention in USDCAD. The sideways consolidation became a little more complicated with the dip and rally but if it can penetrate yesterday’s lows the downside should develop well…

Today’s free analysis is for USDCAD and can be found on http://www.fx-forecaster.com/DailyForecast.html along with yesterday’s Trader Package Review & Trade Set up report (+100 pips).

Good luck
Ian Copsey

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

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