Pages

HARMONIC ELLIOTT WAVE

Thursday, August 19, 2010

There are still two ways to view the current impasse…

Yesterday was pretty much a mess and leaves the situation hanging between two scenarios. I can accept some individual currency pair moves but the problem I continue to have is the balance between the implication for the EURJPY cross and USDCHF…

The problem lies in the extremely limited pullback in EURUSD which has potential to just be part of the decline from 1.3227. However, I feel that the downside would still be relatively limited and then imply a much deeper correction higher… I turn this would cause USDCHF to break above yesterday’s 1.0452 high to imply stronger gains but I’m not convinced these would be limited as implied in EURUSD. The same can be said for GBPUSD which has had a stunted correction in what appears to be a complex correction from the original 1.5534 low…

So if I consider the possibility that the drop from yesterday’s high is just a deep correction lower in EURUSD then it does suit USDCHF but would risk deeper losses in USDJPY which I still find hard. The move I had expected in EURJPY didn’t materialize and this may well be a key factor. I could still accept some losses and actually prefer this to move below the 109.05 low, but again I feel this is more likely to be a complex correction with an ultimate retest of 111.10 being the most probable outcome before it too descends into the abyss.

It’s this anticipated decline which I feel will be quite strong that remains the core issue. I am overall bearish in EURUSD and feel this is the currency pair that will drive the decline. I would much rather see a deeper recovery in EURUSD that would allow the cross to recycle back to 111.10 and then see EURUSD collapse but this will need USDJPY to remain suspended in motion which I find tough…

So the advice I outlined yesterday in terms of the 1.0452 high in USDCHF together with the situation in EURJPY are the two key potential catalysts for the next move. Bear in mind these two and the relative breaks in the individual currency pairs…

AUDUSD actually looks more bearish today but we have to extend losses below the low seen already today and until that occurs then the correction can recycle. USDCAD on the other hand looks like making a key low today so watch out for that one…

Today’s free analysis is for GBPUSD and can be found on http://www.fx-forecaster.com/DailyForecast.html along with yesterday’s Trader Package Review & Trade Set up report. (+100 pips)

Good luck.
Ian Copsey

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

No comments:

Post a Comment