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HARMONIC ELLIOTT WAVE

Wednesday, May 19, 2010

Almost there – but there still seems a little more to go…

It was good to pick the right stalling areas for the correction yesterday which raises the confidence that the structure is developing as expected. I had noted the 1.2150 EURUSD and 1.1542 areas to watch for but this doesn’t look enough with 1.2143 and 1.1530 achieved in these Europeans already this morning and this not really appearing to complete a full structure. However, I suspect they’ll cause a modest correction into European time – may just stretch to NY – but overall I feel today stands a good chance of seeing a significant low. I’m not sure this is a final Dollar high – but for now this should spark a much deeper correction than we’ve seen since 1.3086 and 1.0923.

In addition GBPUSD has made a new low too – so we need to plan for a deeper follow-through – but equally a more sustainable correction should then develop.

When I look at EURJPY, which peaked in the perfect area yesterday, I see a similar picture of a pullback from (probably) just below the 110.60 low but this still has further downside to go. Unless USDJPY is going to collapse – which is not my favored view – then it will mean further Dollar gains against the Europeans but that should occur either by the end of this month or early into next.

USDJPY itself remains in its coma, barely seeing much of a move in either direction. Frankly I can’t quite yet see the end of this although if there is to be any surprise then it’s the downside that would do the trick. However, unless it gets back below 90.84 I feel the range can continue for another day or two.

AUDUSD – now here I have a longer term dilemma. I still see the current decline reaching the 0.8530-78 area. I had been looking for this as a possible end to the recycling from the original 0.9404 high. However, I’m not totally comfortable with the momentum picture. I do feel that this area will provide a pullback but I’d rather wait & watch to see how that develops.

Finally USDCAD corrected a little deeper than expected and this has changed the balance a little. I still have a stronger bullish outlook but there does appear to be a risk of a sideways consolidation so unless this presses strongly above the 1.0435 high we should be prepared for it to revert to what it does best – making erratic and messy sideways corrections.

Today’s free analysis is for EURJPY 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)

Good luck
Ian Copsey

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

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