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HARMONIC ELLIOTT WAVE

Wednesday, October 13, 2010

I think we can say the Dollar low is in place…

Yesterday’s moves tend to suggest the Dollar low is in place. The only doubts I have are in USDCHF and AUDUSD which seem to be resisting the lure for a deeper correction and probably USDJPY also.

The latter caught me out totally. My charting software completely missed the dip to 81.37 seen over Monday’s bank holiday but didn’t really generate any gap in my chart. This has forced me to perform a larger review with the result that the larger decline (which has a long way to go) is underway. What is giving a little problem is identifying just where a correction should develop. We do have hourly & 4-hour bullish divergences but there has been a general lack of power on the upside which, if this persists, would maintain the downward momentum… I just have some reservations given the expected follow-through lower in EURUSD. Therefore, this one remains just a little uncertain.

EURUSD bounced to the point from the 1.3774 support and may well have completed the correction. If it hasn’t, then there’s not much further to go before we see losses resume here. The same can be said of GBPUSD. Both are probably mid-way through their respective correction but we must be aware of the strong chance that the move could stall and consolidate before the decline resumes more firmly.

As I mentioned, USDCHF does appear to be an odd one out in particular. Had 0.9554 been the final low then a move as high as 1.0370 was indicated. Given the limited nature of the anticipated correction in EURUSD the apparent USDCHF target is way too high – unless some greater catalyst causes a spike. Well, I’m not that keen on waiting on a freak happening and this does tend to imply the general daily downtrend remains. We should see some sort of correction but I am finding the identification of this structure just a bit difficult. Thus take care in this currency pair.

I remain with a balanced view on EURJPY and wait reactions. AUDUSD seems to have settled into a range and appears to threaten a new high at some point. USDCAD is probably in the same boat – a consolidation – but with the downside the stronger final risk.

Today’s free analysis is for USDCAD and can be found on http://www.fx-forecaster.com/DailyForecast.html along with yesterday’s Trader Package Review & Trade Set up report. (+60 pips)

Good luck.
Ian Copsey

http://www.fx-forecaster.com/TraderPackage.html
For MT4 users

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