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HARMONIC ELLIOTT WAVE

Wednesday, August 4, 2010

It’s now… or never…

Please note that The Daily Forecaster will be taking its summer break from the 9th-13th August


The market so often strives to confuse... GBPUSD rallied and stalled just 2 points below the upper edge of the 1.5956-69 resistance target. EURUSD played games and edged above the 1.3234-45 target to stall at 1.3261 – ok I can take this. USDJPY made good downside progress to stall at 85.66 but USDCHF stubbornly refused to lie down and die.

Momentum-wise GBPUSD has hourly & 4-hour bearish divergences – but weekly & daily have no reversal signals. EURUSD is hanging on by the fingernails of its Brussels bureaucrats with a daily and 4-hour bearish divergence – just – an hourly divergence that hasn’t really forced any real pullback. USDCHF has a strong daily bullish divergence but the shorter times frames are really mixed. USDJPY has a daily bullish divergence and every chance that intraday will confirm this too.

So where does this leave us? The reversal signals are not the strongest but are there. We have seen GBPUSD extend its rally to extreme projections (according to the structure I have…) USDCHF hasn’t met the ideal target but could reverse while EURUSD is really pushing the upper levels of what I had been considering the daily retracement limits…

As far as I can see any further extensions in the Dollar decline must be limited otherwise the entire mass of the momentum will trigger a stronger follow-through that will destroy the fragile Dollar bullish divergences. What does this normally do? Well, it generally causes mayhem through an acceleration of the trend…

As one subscriber reminded me (as I generally don’t bother to find out) there are a few economic releases due over the rest of this week and a Fed meeting next. While I don’t take any of these into consideration in my analysis I do obviously acknowledge that these releases can generate bedlam if the numbers are unexpected. Coupled with the fact that I am seeing what appears to be a defining moment technically I do think we have to tread a little carefully.

What I do seem to perceive is that even if we are to see the Dollar downtrend continue there is a chance we shall see a pullback first, either directly or from minor new lows. It will no doubt add to the uncertainty over what we are seeing and therefore it will require greater care and attention from this point onwards…

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. (+0 pips)

Good luck
Ian Copsey

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

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