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HARMONIC ELLIOTT WAVE

Friday, October 29, 2010

The Europeans still appear to be on track – just a little more to go…

The European currency pairs have progressed close to expectations. Being in a corrective pattern, a time when patterns can morph into alternative complex structures, we still need to be alert to developments that would suggest a breakdown. As I see things, the balance of the relative structures all appear to be matched in terms of the moves required within their respective positions. Basically, that’s a follow-through from yesterday’s move followed by a deep-ish correction.

That should just about sum up today’s anticipated moves. Early trading implies a slightly deeper correction which should spurn further losses in the Dollar with perhaps GBPUSD most likely to be the strongest of the three. These losses should then be followed by modest strength in the Dollar but more as a correction rather than the stronger directional moves seen over the week. That should see out today’s price action. If I have any doubts on any of these then perhaps it is in USDCHF which saw a limited reaction yesterday and *maybe* potential for a minor new high.

Where things went wrong yesterday were in USDJPY which saw a break of the early support identified that triggered a stronger decline. That leaves me a little uncertain. I am, as always, aware of the larger bearish risk but still have a few doubts that they’ll develop directly. This one will require a little diligence to navigate the next moves.

EURJPY appears stuck in a mire, with a structure that remains difficult to indentify. I can see reasons for this to go in either direction but right now something dramatic appears to be required to generate a difference in the strength of reactions within the individual currency pairs. This doesn’t really seem to be on the horizon today…

AUDUSD appears to need a correction before it can follow-through higher. USDCAD has gone into one of its crazy sideways consolidations…

Today’s free analysis is for GBPUSD and can be found on http://www.fx-forecaster.com/DailyForecast.html along with yesterday’s Trader Package Review & Trade Set up report. (+25 pips)

Have a great weekend
Ian Copsey

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

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