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HARMONIC ELLIOTT WAVE

Friday, July 9, 2010

The lack of reversal is getting rather tiresome... but there is still an argument for a correction

Well, there is no doubt that the Dollar bearish momentum has slowed but the lack of reversal has been rather frustrating. However, the more this develops in the same way – and I may have to extend my downside targets just a bit more – the momentum picture continues to deteriorate. Dollar bullish divergences are deepening in the slightly longer term intraday charts and it’s just down to the hourly charts where we need a swirl of cream on the top. While EURUSD is in a slightly different position in its structure compared to GBPUSD and USDCHF, the latter two do seem to be requiring a deeper correction. EURUSD could just get by without one but the entire structure would benefit from a sizeable correction.

So we are left with some early wiggle room for limited corrections across all three but we still have the risk of new Dollar lows lurking in the background. I’m not sure whether the decline could slow any further and therefore we must see a make-or-break move today one way or another…

USDJPY… the pointer from EURJPY gave this away yesterday quite nicely. The high at 112.50 was just 6 pips above the intermediate resistance and I still feel this is going to be at the center of proceedings today. I have to say that I don’t see much more room on the upside for USDJPY though there should be another push higher today. However, for EURJPY to reach back to the 113.40-60 area we are going to need EURUSD to push a little higher also. The implication at 113.40-60, and check out momentum conditions when we get there, is for a reversal lower and probably to new lows. Thus, the combination of both USDJPY and EURUSD reaching targets around the same time may well prove to be a catalyst for all three to collapse…

AUDUSD was strong. I’m not too surprised be back close to the 0.8858 high but hadn’t anticipated such a direct move. It may well just tip over 0.8858 but a correction is due so be aware of a possible correction starting soon after breach. USDCAD moved perfectly into its target area and that too is now due a pullback, and possibly longer consolidation, before the next leg lower…

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. (+40 pips)

Have a great weekend
Ian Copsey

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

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