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HARMONIC ELLIOTT WAVE

Thursday, June 3, 2010

There are still some inconsistencies that could cause some more whippy moves…

For the Europeans in general yesterday I have to say the results were inconclusive. GBPUSD started on its way to 1.4810 but then stalled some way before target. As a retracement I could accept this and call for losses. However, the internal relationships also messed up completely and that has left me scratching my head…

The continental Europeans had a day off, seeing choppy range trading with the market unwilling to commit in either direction. Standing back I still can’t find convincing wave relationships in the decline from 1.2670 EURUSD and if I have any preference then I’d like to see one more minor new low here and then a total reversal. The issue with this is the potential implications for USDCHF and GBPUSD… both apparently having limited room for any more significant Dollar losses.

On the flip side, there really isn’t much of an argument to suggest the Dollar rally has come to an end. Momentum remains bullish and therefore this appears more to be a correction only. However, it seems the market requires a catalyst and perhaps this will mean that we shall see today being very similar to yesterday as the market waits to see the impact of the Non Farm Payrolls tomorrow. Technically it will be helpful to see a more definitive move to start catching up on structural relationships.

The more successful currency pair yesterday was USDJPY which has forged higher but hasn’t quite reached the 92.58 resistance. I still see this area between 92.48-58 as important but from the way price progressed yesterday I don’t see this as the end. Sure, I think we’ll get a pullback but the intermediate target appears to be shifting higher once again. Thus, look more to buy on dips still.

This also appears to be reflected in EURJPY which had a positive day as expected also but failed to really impress. I see risk of a pullback here and potentially a recycling of the correction back to 110.78-98 before it can push higher again.

AUDUSD had an initial decline but the recovery has been constructive – look for a retest of the 0.8539-48 area eventually but take care around 0.8460 first. USDCAD came lower at long last. This too seems to have further to go but there is risk of initial consolidation.

Today’s free analysis is for GBPUSD and can be found on http://www.fx-forecaster.com/DailyForecast.html along with yesterday’s Trader Package Review & Trade Set up report. (+130 pips)

Good luck
Ian Copsey

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

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