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HARMONIC ELLIOTT WAVE

Thursday, October 14, 2010

The depth of yesterday’s pullback is bugging me…

I do really want this Dollar bullish correction to continue… but I do wish yesterday’s decline would come to a halt… All around in the Europeans the Dollar has declined right to the limit of my acceptance. The underlying correction I have been anticipating is one of those that has no real set retracement ratio but what we have seen thus far just doesn’t seem enough… Indeed, EURUSD does just resume its rampant uptrend the ratios from two perspectives would actually still slot in nicely…

But really… this is meant to be a correction to the rally from 1.2586…

For now, I’m going to approach this with caution. If this is going to be a very shallow correction then I can still see potential for some complications that could generate recycling and until those barriers are overcome I’ll remain open to both sides of the market.

I did review USDCHF and USDJPY yesterday, going back into the monthly & weekly charts and found some interesting long term implications, of course Dollar bearish which has always been the larger influence in the background from both structure and time cycles. However, in both I still find the base of the current move still a little vague. This adds a little to the uncertainty of current developments.

To add to the overall Dollar bearish implications both AUDUSD and USDCAD saw the Dollar extend losses, in the latter quite considerably. Indeed, with USDCAD having broken lower from a 6 month triangle the downside is most definitely vulnerable and on the verge of confirming a stronger follow through if yesterday’s low is broken by much more… AUDUSD is in much the same situation as the Europeans in that it is still in an area that could generate a recycling.

Finally, on the EURJPY cross yesterday’s rally was constructive but still has a little more to go on the upside to suggest it will resume the larger uptrend.

Overall then, I can see some conflicts and possible complications so today’s analysis will remain balanced and due observation will be required at key potential break levels…

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. (+120 pips)

Good luck.
Ian Copsey

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

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