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HARMONIC ELLIOTT WAVE

Wednesday, June 30, 2010

There’s still one more leg lower left for EURUSD…

The losses in EURUSD actually developed a little faster than I had anticipated but at least it’s in the right direction even if USDCHF also decided to edge lower a bit also... Commenting on EURUSD only the decline has been close to expectations, yesterday’s low just 20 pips below my favored target but still at valid projections. This should cause a correction which should be modestly deep and probably take at least half of today and if it gets more complicated – which is a distinct possibility – then perhaps it can last through to early tomorrow. Once this correction is complete then we can anticipate the final leg lower before a larger reversal.

Just stepping back this correction from 1.2466 has developed in a manner that could generate a sideways consolidation that could then extend the correction for some while longer. However, this will also probably mean that we need USDCHF to be in a position to do the same. The issue here is that USDCHF hasn’t reached its target as far as I can see. Normally in trending moves one of the major corrections is deep – and that wasn’t the first so it implies that the next low should provide that longer correction. This should imply that USDCHF should be taking advantage of the current bullish correction in EURUSD to extend losses again today…

I feel too that GBPUSD is close to a high that should cause a longer correction also and therefore it will be useful to keep this possible long correction in mind.

USDJPY… bearish. The more this develops and the way the structural development has progressed is beginning to make me feel like we shall eventually retest the 84.82 low… It’s a bit earlier than I had wanted but does fit into the larger weekly picture. It’s not going to happen this week… I think… but will probably occur while the Europeans are consolidating. Thus bear in mind the apparent bearish implications as we move forward.

In the monthly structure this all tends to correlate as after the current correction higher in EURUSD & GBPUSD (probably) I will be looking for new lows (while USDCHF should just register a deep correction) and I suspect that USDJPY will finish its weekly consolidation at the same time. This should be followed by the bearish monthly cycles in the Dollar kicking in and surprising us all with a steady decline…

Overall EURJPY is bearish but I’m not convinced it will drop much below 106.33-50 at this time. That’s a bit touch-and-go as overall there is still downward pressure to around 100 so it’s a matter of whether this decline is part of this final wave or we’re seeing a complicated correction…

Today’s free analysis is for USDCAD and can be found on http://www.fx-forecaster.com/DailyForecast.html along with yesterday’s Trader Package Review & Trade Set up report. (+35 pips)

Good luck
Ian Copsey

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

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