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HARMONIC ELLIOTT WAVE

Tuesday, June 1, 2010

It looks like the erratic range trading is here to stay for a while longer…

Friday began positively. I even began to get moderately bullish for the Euro but then it all caved in and triggered position squaring ahead of the long weekend to cause the entire structure to revert back into rather messy confusion. I really can’t see much of an alternative – unless the Dollar resumes its rally but the overall correction doesn’t yet look complete.

This means we’re going to have to remain on our guard for what may be the rest of the week… The day has started with the Dollar pushing higher but I’m not convinced that this will be sustainable. I remain with the view that USDCHF still needs to see a deeper correction lower before it can extend its gains so for now I retain the view that we are seeing a correction within a correction with all the untidy baggage that tends to belong to such events.

USDJPY came through firmly and made decent upside progress. I’d like to think this can extend its gains further but any pullback should be limited for now else this may well also turn into another sideways consolidation that frankly would appear to be quite horrendous and could last quite some time. My preference is bullish here but I’m treating the current move with some care and waiting for price to provide greater evidence that my bullish suspicions are valid… Ideally this shouldn’t move below 90.75 to retain that outlook.

This loosely fits in with EURJPY that ended a corrective move on Friday at 113.67 and is currently seeing a pullback. It doesn’t appear to have met its upside corrective target yet and should therefore extend these. Hence the outlook for EURUSD to extend gains (within range) and for USDJPY to maintain its bullish structure appear to fit into this scenario.

Much can be said of AUDUSD though once again I think we need to be flexible. It is going through a correction but what we now need to see is whether this avoids a retest of the lows or whether it will become more complex. USDCAD… looks bearish but the current structure doesn’t seem to fit into the larger scheme of things. Take care with this one too.

So, very clearly, the overall message is that care is going to be required. I still tend to feel that we should be selling Dollars into rallies but making sure that entries are confirmed with some decent set ups. Take your profits early and don’t expect to make a killing right now.

Today’s free analysis is for USDCAD and can be found on http://www.fx-forecaster.com/DailyForecast.html along with Friday’s Trader Package Review & Trade Set up report. (+110 pips)

Have a profitable week
Ian Copsey

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

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