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HARMONIC ELLIOTT WAVE

Tuesday, May 4, 2010

Today should provide more information on whether Dollar gains will be direct…

I’m pretty satisfied with yesterday’s price development. The Dollar pushed higher to escape from the threat of the uptrend stalling and retains the targets I have been outlining. Now the question remains whether it will do so directly or whether we’ll see further consolidation before what I consider should be the final rally to what I consider could well be the Dollar highs for the year.

If I have any preference then it’s for consolidation. This seems to be the common risk across the three European currencies. Certainly, if GBPUSD goes down now it would threaten a stronger bearish move. That may not sound too critical but if it breaks below 1.5125 then it will be hard to retain the larger bullish structure. By rallying today within its consolidation range it can then allow a dip by tomorrow or Thursday as part of its corrective structure. This would then imply that EURUSD and USDCHF can spend that time consolidating also. This may even extend the downside target for EURUSD… but we’ll wait to see what occurs today.

USDJPY spent a long, long time making up its mind whether it wanted to push higher but held that 93.84 support firmly. It does still have further to go I think but I’m being forced to rein back on my very bullish target as it just doesn’t seem to have the legs for the higher 97.26 target and may not even get beyond the 96.02 area… In the meantime it looks as if it will find the 95.20 resistance a barrier and fall back into a correction.

With the combination of USDJPY being firm and as long as EURUSD rallies it should keep EURJPY supported but it hasn’t really displayed much enthusiasm for the upside. I feel it can make a little headway but may find the 125.87-92 area difficult to overcome.

AUDUSD failed to really provide any information about its intentions. I’m still in two minds here. In the larger picture it remains bullish and the only question in my mind is whether it will rally directly or see a deeper pullback first… However, keep in the back of your mind that it has always been bought on dips and I can’t see this changing for a while.

Finally, USDCAD… hanging on by its nails to a possible bullish structure. If it rallies I fancy it could well be strong else the risk is for it to drift back lower again iin its larger consolidation range.

Today’s free analysis is for EURUSD and can be found on http://www.fx-forecaster.com/DailyForecast.html along with yesterday’s Trader Package Review & Trade Set up report (+80 pips).

Good luck
Ian Copsey

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

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