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HARMONIC ELLIOTT WAVE

Thursday, August 5, 2010

Yesterday’s moves were encouraging. Follow-through today would add some icing on the cake…

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


Despite all the rather mixed signals yesterday provided the push up in the Dollar needed to retain the prospect of a major high having been seen. The dip lower by USDJPY into its target zone helped by adding one more of the 4 majors to reach target while the completed double bottom in USDCHF provided conformation of gains.

So is that it? I think maybe it is – well all apart from a possible new low in USDJPY. However, I can’t say it is a done deal, done and dusted, cut & dried, in the pan quite yet. In terms of the larger picture we haven’t yet revisited key retracement areas or even broken Dollar swing highs so there’s some work still to be done. However, the initial stages do look constructive and this is what I’ll be concentrating on today to ensure that we are seeing the correct structural development that is in line with the initial stages of the reversal.

Just taking a step back and on the assumption we have seen a major turn I should outline that I will be expecting a new low in EURUSD but no breach of the weekly Dollar highs at 1.1730 USDCHF, 1.4231 GBPUSD and 94.98 USDJPY. I mention this as it does appear to be a mainly Euro inspired move and therefore it should weaken against the other three as we move forward over what should be a 2-4 month move.

Just to repeat a comment above I think we should be aware today that, in spite of USDJPY dipping into the targeted zone, I am not convinced at this point that we have seen the final low and that may well come today. The only confusion is that EURJPY hasn’t laid down and died yet and is threatening a minor new high above the 114.18 corrective high but I don’t see it breaching the 114.73 high.

AUDUSD was hardly impacted by the moves elsewhere and closed towards its highs. I’m slightly cautious about this but the upside does still seem to have upside room. Again, this tends to fit in with my perception that the coming U.S. Dollar strength appears more Euro based and dragging USDJPY with it, the latter quite happily no doubt with the carry trade quite possibly driving.

USDCAD also has room for one more dip before that reverses higher…

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. (+140 pips)

Good luck
Ian Copsey

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

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