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HARMONIC ELLIOTT WAVE

Wednesday, July 21, 2010

Maybe the Europeans are beginning to converge…

It was another day where the unexpected occurred. EURUSD suddenly blipped to a marginal new high and was followed by a stronger reversal while USDCHF became a spectator and GBPUSD continued its persistent decline. This may be the catalyst for the deeper correction in EURUSD which I have been expecting to see. It’s still going to require some rather unusual developments similar to yesterday to really satisfy my demands of EURUSD but yesterday was an encouraging pointer that it may occur.

This should be reflected in a less robust way in USDCHF which may just manage to surmount the 1.0600 area while GBPUSD has less potential today. If it does make a new low it should only be marginal as the degree of pullback from the 1.5470 high is now bumping on fairly important support levels.

Thus today we’ll have to watch how initial trading develops. At the same time we musty be aware that the main direction is Dollar bearish for now and today should provide the last window of opportunity for the losses to resume. I still feel this will be the last leg lower so keep an eye on medium term momentum conditions which are already beginning to build up the beginning of possible daily Dollar bullish divergences…

USDJPY has confirmed that it’s in a correction higher and that too appears to be coming to an end and I fancy today providing the corrective high also. We have to keep in mind the situation in EURJPY as well and this could be crucial and to me there is still some question market over which of the component majors will trigger the next move. Yesterday’s up-and-downer almost seems to set up the possibility of a final push to the 113.81-06 area. If this is to occur then I’d judge that it needs to do this early while EURUSD can pullback higher together with a firmer USDJPY before declining… Any other route would appear to involve too much volatility…

AUDUSD remains firm and should extend higher again today. I fancy USDCAD doing the same also – as long as the 1.0390-00 area supports…

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. (+120 pips)

Good luck
Ian Copsey

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

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