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HARMONIC ELLIOTT WAVE

Friday, September 17, 2010

Momentum appears to be slowing

I can’t say I was particularly satisfied with yesterday’s analysis. There were a few good bits but mostly it was off-target. The continued strength in both EURUSD and USDCHF sustained the unwinding of the bearish EURCHF cross while USDJPY was left floating in a cloud. I have to say that in general the underlying momentum of the past few days’ movements remains quite strong and there does seem to be more left in this. However, in the shorter term there are some signs of exhaustion and in spite of the incorrect calls yesterday I do feel a correction is due.

In the larger picture I have moved more strongly to the view that the call for a new low below 1.1879 EURUSD is less realistic now. However, I remain a little mixed as to whether the decline to 1.2586 formed a complete correction or whether a second leg is possible. The reasoning behind that lies in the solid bounce in USDCHF from the sort of support area I had outlined. This can also be said for the bounce from the 82.87 target in USDJPY… In GBPUSD the correction from the 1.5597 high has been relatively shallow and the correction higher stuttered more than rushed.

Therefore the jury is still out for me overall but stronger reversal signals haven’t quite yet appeared and even in EURJPY the overall rally doesn’t look exhausted. However, the shorter term does seem to require a correction before it can extend further. Thus, with some trepidation after yesterday’s calls I’m going to be repeating my calls for a correction but with the possibility of minor new extensions in USDCHF and maybe GBPUSD.

AUDUSD has started to become less clear. I feel a pullback lower is also due here but I’m not quite sure this will be direct. USDCAD has lulled into one of its choppy consolidations. I still remain more biased towards a minor new low before recovering…

Thus watch for breaks today that would suggest price will settle down to a brief period of corrective activity.

Today’s free analysis is for USDCHF and can be found on http://www.fx-forecaster.com/DailyForecast.html along with yesterday’s Trader Package Review & Trade Set up report. (+40 pips)

Have a great weekend.
Ian Copsey

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

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