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HARMONIC ELLIOTT WAVE

Monday, June 14, 2010

The Dollar should make further downside progress but soon make a temporary low

Friday was a little better. Not everything went entirely in the way I expected but overall the move is progressing close to the underlying template. This current decline in the Dollar has a little more to go but I can see some support coming up that should lead to a correction that may last until the end of the week – or perhaps just Thursday. Since this is a correction within a correction we have to be aware that it could be pretty messy so take care.

Therefore the day’s objective should be to identify the final lows and I’ll highlight the sort of areas I feel have the greatest chance of providing those lows within the individual analyses. There is one exception which is GBPUSD that failed to make new highs on Friday and suffered a much deeper correction. This tends to argue a larger sideways correction before the next leg higher. While a few days away what we should be attempting to look for is the end of the GBPUSD correction to tie in with the Dollar’s corrective highs in EURUSD and USDCHF.

USDJPY… While I was writing the weekly indicator review (http://www.fx-forecaster.com/files/Weekly_Review_Support_Resistance_11th_June_2010.pdf) I looked at the weekly chart and first thought was “what a mess it has been since 87.10 way back in January 2009.” Normally the term “mess,” apart from being an adjective for my daughter’s room, basically implies a corrective structure. So I had a long look at the idea this morning and while it’ll probably still take some while to work through I think that’s what we’re seeing. Trying to work this into the short term it should mean we’ll still see more gains.

Add to this the fact that EURJPY also looks bullish and by the end of today I’m expecting EURUSD to top out the conclusion is that we’re going to see some solid gains in USDJPY. It’s just a matter of how this develops in terms of the ebb and flow in the individual components of EURJPY.

AUDUSD… well… this is confusing me as I have been looking for a high here too not far above the old 0.8548 high. However, what that appears to imply is new lows – and I mean below 0.8065… Given the fact I’m not that bearish in EURUSD (and indeed, in the larger picture I am bullish) I do find some conflict. So for now I’ll watch for the expected high today along with EURUSD and then watch the reaction.

USDCAD… Quite possibly a little lower again but then a pullback but all within a larger bearish move.

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

Have a profitable week
Ian Copsey

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

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