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HARMONIC ELLIOTT WAVE

Tuesday, May 11, 2010

Yesterday’s moves haven’t convinced me that the Dollar has reversed yet

The market played safe by apparently squaring out or reducing the short Euro risk with the ECB promising to play hard ball. I was looking for some stronger confirmation of a larger reversal but frankly I didn’t really see any. It’s still possible but the retracement in EURUSD really needs to get above 1.3110 for the downtrend to look troubled.

What does confuse is USDCHF which broke below my favored support only to bounce from the 1.0923 pivot support. I’d wanted to suggest that break of 1.0978 would be bearish but there doesn’t appear to be a completed bullish structure yet. I’m therefore left hanging in limbo. However, the term limbo may well describe the possible development over the next 2 days or so. As an outline, if USDCHF goes into a triangle and EURUSD sees a sideways consolidation (may be a flat correction that remains below 1.3110) then it will herald a final dip by Friday or into early next week… This will be what I shall be looking for. GBPUSD may well follow the consolidation scenario also.

USDJPY… wasn’t as strong as I would have liked and I am also aware of the pullback in EURJPY which failed below the 122.48 resistance. This means we may just see USDJPY edge lower also and in that case I can’t rule out a modestly deep pullback. Only back above yesterday’s highs would maintain the upward momentum…

AUDUSD topped out perfectly in the 0.9070-80 area and this should be heading lower along with the European moves. USDCAD … may have completed its correction. This will require a little more care but I shall be expecting a second push higher before too long.

By-word for the day is caution …

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. (+170 pips)

Good luck
Ian Copsey

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

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