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HARMONIC ELLIOTT WAVE

Tuesday, September 21, 2010

Apart from the anticipated correction yesterday wasn’t too convincing…

At least we saw the corrections higher in EURUSD and GBPUSD stall in the right areas. The Pound then saw a more convincing decline but left the Euro a little behind. It was partly positive for my preferred Dollar bullish view but didn’t really do enough to really confirm the strength. I’m not even convinced that we’ll see any confirmation today as GBPUSD appears to require a pullback higher at the very least while EURUSD is threatening further sideways consolidation, possibly even with a minor new low.

The idea of a rather dull day, or part of, appears to be echoed by the EURJPY cross. I remain bullish on this but equally I feel the correction lower needs to deepen a little further before the next leg higher. The next question is whether this will be driven by EURUSD or USDJPY… or perhaps a little of both. I remain with the view that overall USDJPY does need another new high and quite a solid one before this can retrace lower. However, the rather abnormally extended narrow sideways consolidation has begun to conceal the true internal structure.

Therefore, there are still some potentially tricky issues to cover before this all unravels. My ideal is for EURUSD to fuel the dip in EURJPY but then see a pullback. A combination then of both EURUSD correcting higher and USDJPY extending gains would begin to satisfy the anticipated follow-through higher in the cross…

Thus, I’ll try and outline the key areas in each currency pair and with the general conditions outlines above we’re going to have to work through this period of uncertainty.

AUDUSD has seen gains extend but interestingly this is approaching a key resistance I have been highlighting for the past few days. There is a good chance this target will be seen today and should provoke quite a solid correction. Bearish divergences are building in the hourly & 4-hour charts.

USDCAD remain mixed which is some ways is not a big surprise as the 6 month sideways consolidation remains in place. I do feel it will be completed relatively soon – and possibly as soon as next week. Once this does end the next move should have potential to be quite aggressive…

Today’s free analysis is for AUDUSD and can be found on http://www.fx-forecaster.com/DailyForecast.html along with yesterday’s Trader Package Review & Trade Set up report. (+50 pips)

Good luck.
Ian Copsey

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

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