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HARMONIC ELLIOTT WAVE

Thursday, October 7, 2010

Almost there… just a bit more…

I’m just a bit disappointed that we didn’t get a deeper early pullback yesterday but the final result in a lower Dollar is basically in line with expectations and today does look like being a repeat… The only slight concern I have is the apparent differing proximity to the final targets between EURUSD and USDCHF… perhaps even GBPUSD also. There’s not an enormous difference in terms of points but when considering structure USDCHF certainly seems to need a further pullback from a marginal new low whereas EURUSD just needs one more rally.

Therefore I have to consider the potential for a more complex correction in which EURUSD moves sideways while USDCHF corrects, satisfies that marginal new low and then for them both to reach respective targets. As for GBPUSD, well, it’s just dragging its heels and making hard work for itself trying to reach its targets. Again, it could well imply a more complicated correction to allow the necessary foundation for the final leg higher.

USDJPY – did what it oughta… but tantalizingly stalled 6 pips above the ideal target. Has it completed the decline or does it has one more push to the downside? Frankly the pace it is moving these days makes it very tough to be certain of the structure. What I do feel is that even if there is a new low it will be marginal and I am beginning to eye the upside.

I think it’s needed too to allow EURJPY to maintain its rally. Obviously EURUSD will do it’s share of the work until it reached its summit but there may well be a little more work to do after that. Yes, there is a correction due but there are still a couple more upside targets (and intermediate corrections) to go before that larger correction. As EURUSD declines (and this is more likely to start from tomorrow or Monday) USDJPY is going to have to do one of its impersonations of a rocket in flight to maintain the upward trajectory for the cross. Today looks quite a standard continuation of recent price action though.

AUDUSD – still has further to go rather as elsewhere. The same is true of USDCAD which certainly looks to have stated its long term intent to push lower. However, the larger decline does not look like developing directly although a marginal new low is still expected by tomorrow before a larger correction.

The DJIA also looks on target to reach its high by tomorrow… Gold doesn't look like a million miles from its high too.

Today’s free analysis is for EURUSD and can be found on http://www.fx-forecaster.com/DailyForecast.html along with yesterday’s Trader Package Review & Trade Set up report. (+0 pips)

Good luck.
Ian Copsey

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

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