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HARMONIC ELLIOTT WAVE

Tuesday, September 14, 2010

It’s time to regroup and adjust…

Well, yesterday put the direct Euro decline to bed. I haven’t totally given up on a new low below 1.1879 but have to concede that this move higher has made that event a little more extreme than I would have liked. However, before I can begin to contemplate losses again I still feel there is still upside risk that needs attention.

Two other significant developments yesterday were the limited gains seen in GBPUSD and the constructive losses in USDCHF. What I tentatively see in these two are continued consolidation and losses respectively which need to be managed within the general expectation of a pullback and rally in EURUSD. It does suggest a short period of relatively independent movement from the three Europeans but if this does develop then it could be quite a good indicator for the maturation of the complete correction. Therefore, I think today is going to be one that requires some care and observation across the three European Amigos.

A pointer may again come from EURJPY. Rather than see the more direct decline I had been anticipating it is beginning to look more strongly as if this cross is developing in a sideways consolidation – perhaps a triangle – that still has some way to go before it completes. If I am right in this observation then today is a bit of a down and up day that should eventually find a peak to return it back into the overall range. The entire pattern could take the remainder of the week to come to a conclusion.

The failure for USDJPY to break above Friday’s high has caused another about-turn that should keep the decline intact over today. I still suspect a new low but I am not in favor of a direct route so expect the entire structure to remain a bit choppy. The only thing about USDJPY that concerns is that the daily bullish divergence has brought no positive reaction at all and if it doesn’t stop at my targets then we could well be talking about a retest of the 79.70 historic low over the coming 1-2 weeks… I am a long term Dollar bear for another 2+ years but hadn’t really expected this to occur directly so the coming dip should be watched carefully.

AUDUSD stalled a few pips below the higher resistance at 0.9364 but appears to have exhausted itself so look for a bearish day. USDCAD has probably found support – or will not too far below – and I suspect a recycling of the correction back higher.

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. (+5 pips)

Good luck.
Ian Copsey

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

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