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HARMONIC ELLIOTT WAVE

Wednesday, June 9, 2010

Just a little more consolidation and then we should see the final spike higher

That was a pretty messy day. However, there were two clues yesterday which we need to heed. First, the length of the pullback in EURUSD has been rather long but not too deep while the drop in USDCHF is beginning to suggest it may have seen its major high already…

If these two observations are correct I suspect that what we shall need is a marginal new high in EURUSD but also a marginal new low below 1.1426 in USDCHF. This low in USDCHF would imply a pullback that has every chance of being deep. The marginal new high in EURUSD should complete its correction and send it to new lows where it should complete its decline. This may occur by the end of today or may just stretch into tomorrow. However, I suggest watching for the two events and then observe bearish Dollar trade set ups…

One confusion is GBPUSD which made a minor new low yesterday but is recovering. I’m not 100% clear on the eventual outcome since even if we get this pair declining along with EURUSD it would not appear to complete its overall decline… This is a situation that needs be watched. However, I don’t foresee this breaking below the 1.4231 low at this point.

USDJPY… This has been quite a headache. It hasn’t been doing what I think it should be doing and while there may be consolidation today there appears to be a growing risk of a subsequent decline within an overall broad sideways consolidation. The issue this raises is whether this correction began at 94.98 or from the 88.97 low – the difference between eventual bullish and bearish follow-through…

Still, along with this situation I feel that while EURJPY needs just a little more sideways consolidation the outcome should be a move below 105.00. This will then depend on whether USDJPY drives it or the anticipated spike lower in EURUSD… We shall need to observe the balance but it does tend to imply that USDJPY should remain range bound for a while longer.

AUDUSD is till due a lower low while USDCAD should now (finally) begin to rally…

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. (+0 pips)

Good luck
Ian Copsey

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

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