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HARMONIC ELLIOTT WAVE

Monday, June 21, 2010

Targets met and pullbacks due but how deep and how long is the big question

We broadly saw the Dollar perform close to overall expectations though this morning’s little gap lower for the Dollar provided the final push to reach these targets. It does seem as if we’re now seeing the anticipated corrections so key now is identifying how complex these will be and when they will complete. It’s not impossible that today could complete the corrections and probably no later than early tomorrow. The underlying direction for the Dollar remains lower and the risk of a deep correction does appear pretty slim.

That should keep the Dollar weighed down for most of the rest of the week. I am in two minds about the overall extent of the losses as I can’t see that we’re that far away from key lows in USDCHF, probably GBPUSD also. However, what does confuse is the much more ambitious targets in EURUSD. I’m going to approach this carefully and keep an eye on the wave development across all currency pairs to watch for a correlated approach but if anything is to give way then it looks like being EURUSD.

Another issue that confuses is EURJPY which I had expected to reach above 114.00 on Friday but which instead took the day off on Friday to extend the tight range trading. Already we have seen USDJPY correct quite firmly but I’m a bit reluctant to call for a total reversal higher as I still feel that there is further to go on the downside. In turn quite how EURJPY will react is not clear but for now stick with the range.

AUDUSD has confirmed a more bullish structure also, albeit a little earlier than I had expected but does have further to go. Equally, USDCAD failed to see any deeper pullback higher and is resuming its downtrend. A move below 1.0000 does look in the cards.

Today’s free analysis is for AUDUSD and can be found on http://www.fx-forecaster.com/DailyForecast.html along with Friday’s Trader Package Review & Trade Set up report. (+60 pips)

Have a profitable week
Ian Copsey

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

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