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HARMONIC ELLIOTT WAVE

Thursday, June 24, 2010

Yesterday confirmed a second corrective rally for the Dollar…

It didn’t quite take the route I had expected but the test of the high end of the 1.2190-10 EURUSD support has broken the immediate trend and means we’ll have to wait for longer to reach the 1.3200-50 target. In fact, after the next push higher for the Dollar it has a strong risk of seeing a fairly long period (maybe most of next week) of consolidation.

Basically it’s going to mean that we’re going to remove the “trend” cap and put on a “this is going to be messy cap.”

First off, just concentrating on today and tomorrow there still needs to be one more rally for the Dollar. I can’t see that there’s very much left to go in this correction – probably minor new Dollar lows – before this second leg develops. Therefore emphasis in the first half of today should be on spotting Dollar buying opportunities. Probably by the end of tomorrow we’ll have to turn round and look to sell again…

If there is any European pair that causes slightly larger confusion it’s GBPUSD. It has come pretty close to what I had as a final target. At the moment the peak it reached yesterday is perhaps more indicative of just a recycling of the correction but this will not leave too much elbow room on the topside before it reaches target. However, a recycling of the correction would not last the whole of next week – in fact only until tomorrow… Therefore, either we’re going to see it reach target today and then drive strongly lower or there has to be an alternative, possibly higher target. This is a situation that needs more care.

USDJPY… well, that correction didn’t last long. In fact, it turned out to be quite a shallow irregular triangle. It does still seem to have one more leg to go but there’s little left on the downside now. Even EURJPY is suggesting the same so the implication does appear to be for a strong recovery in both… It does seem to fit since I am looking for the larger sideways range trading to continue so a consolidating European picture tends to slot in quite nicely.

AUDUSD has further to dip similar to the Europeans. USDCAD has me somewhat bemused but if anything I favor this reversing lower too…

Today’s free analysis is for EURUSD and can be found on http://www.fx-forecaster.com/DailyForecast.html along with yesterday’s Trader Package Review & Trade Set up report. (+145 pips)

Good luck
Ian Copsey

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

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