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HARMONIC ELLIOTT WAVE

Thursday, May 27, 2010

I can’t help it but I still see the Dollar falling back…

The Dollar bearish structure soon broke down yesterday and has provoked follow-through in both EURUSD and USDCHF although, as seems to be normal these days, not to the same degree. GBPUSD on the other hand decided it was more interesting to watch the other two and retain its range trading. Thus I am left eyeing a potential test of the 1.2143 low EURUSD and probably a mild overshoot.

However, momentum has not been startling and is beginning to show signs of bullish divergences in both hourly & 4-hour charts. When I look at this along with what appears to be a potential sideways channel correction in USDCHF which does seem to require a deeper pullback lower I begin to think of corrections recycling. Add to the mix the indifference in GBPUSD which also looks more corrective and it appears to add up to the same result…

Thus, while I do feel the Dollar should probe a little higher following the current correction I am more inclined to say the Dollar will end much lower today.

Now, USDJPY concerns. It failed just below the key 90.96 resistance and the pullback has stalled tantalizingly between bullish & bearish scenarios. I still have a mild preference for the upside but any loss of this morning’s low would cause me to abandon that pretty quickly… That picture is confused by EURJPY which failed to make any further bullish headway yesterday and instead drifted lower for the majority of the day. This is one I find particularly tough to decide upon with projection ratios not really holding in either direction. The fact I feel EURUSD will bounce should keep it supported but the immediate issue is whether it will make any new low before the recovery. This we’ll have to take carefully and watch what happens to USDJPY also…

AUDUSD – failed in the 0.8361-96 resistance as expected and does seem to be pointing lower again to new lows but I don’t expect a runaway decline and probably a reversal later in the day – or maybe tomorrow. USDCAD surprised with the depth of the correction but I remain bullish and to a higher target now…

Today’s free analysis is for AUDUSD and can be found on http://www.fx-forecaster.com/DailyForecast.html along with yesterday’s Trader Package Review & Trade Set up report. (+20 pips)

Good luck
Ian Copsey

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

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