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HARMONIC ELLIOTT WAVE

Monday, June 7, 2010

The Dollar resumes its gains against the Europeans but I think we’re not too far off a major low…

At long last the confusion appears to be settled. The trigger for me was the pullback in USDCHF that reached just above the higher 1.1418 support and the drop to below 1.4550 GBPUSD… These confirmed their corrections had ended and along with confirmation of losses below 1.2066 EURUSD the Dollar pushed higher over the rest of Friday.

While I would have liked to have been more definite about that event the moves have added more clarity with the interesting point being that I really don’t think we’ll see a massive follow-through and by midweek, maybe, we’ll see the end of this current move. In turn I see the pullback being much stronger and sustainable. I don’t think it’s the end of the overall rally as weekly momentum is still pretty bullish. Therefore I’ll just expect a substantial correction, the biggest we have seen for some while.

There is just one ambiguity I don’t really like and that is the decline in GBPUSD does seem to be lacking somewhat and I’m just a bit concerned that will not find its target at the same time as EURUSD and USDCHF… I’ll watch this as the moves develop.

USDJPY failed to rally as strongly as I’d envisioned and this morning has approached what I feel is critical support at 91.06… I’m just a bit concerned as momentum doesn’t look that positive – and at the same time EURJPY does appear to have further to go on the downside – its overall target way down at the 101-104 area that seems to me to imply more than just weakness in EURUSD. Therefore, take care with this one. I’ll have to see how this develops.

AUDUSD has reversed lower too and does seem to have further to go - at least to the 0.8065 low, possibly lower. I’m tending to favor this being a complex correction that would cause a recycling higher back to 0.8548 but the problem is when. I think we’ll have to watch this in conjunction with the expected Dollar high against the Europeans and match these with the normal complex expansions that occur…

Finally USDCAD did see another low and is now pushing much higher. I don’t expect a new high here an tentatively look for this rally to fall short of 1.0800…

Today’s free analysis is for USDCHF and can be found on http://www.fx-forecaster.com/DailyForecast.html along with Friday’s Trader Package Review & Trade Set up report. (+95 pips)

Have a profitable week
Ian Copsey

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

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