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HARMONIC ELLIOTT WAVE

Friday, October 22, 2010

Neutral

It looks like the bearish Dollar risk has been brought back from the brink. Given this is a correction it leaves the door open to a few scenarios which is going to make the descriptions of what to look for quite complicated and may well be a signal to take a long weekend. I perceive the Dollar risk as higher but even within that there is a minor risk of EURUSD making one more blip higher – probably not but I can’t rule it out.

I much prefer a reversal lower in EURUSD as I see the same in EURJPY. Given USDJPY has a strong tendency these days to spend 90% of the time in sheer boredom, separated by 10% of total panic, as long as the panic doesn’t occur today then a lower EURUSD should be the driver of the cross.

USDCHF looks positive, GBPUSD mixed but currently on the weak side and may just extend losses to new lows. However, with the deeper correction higher I’m not expecting dramatic losses. Sideways consolidation is the only alternative as far as I can see at this stage.

On a side note the DJIA actually made a new high in this rally above 11,200 but below the 11,258 high… I’m not going to get too excited there until the 11,258 high is taken out and I doubt it will just yet. Gold lost out as I had suggested and while it depends on which leads the others, the corrective scenario seems the stronger of the choices right now.

AUDUSD confuses so I feel we should avoid that until a stronger break is made while USDCAD should lose out again today.

That’s it for the week… It hasn’t been a particularly incisive outlook but I feel that actually reflects the probable outcome today…

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. (+55 pips)

Have a great weekend
Ian Copsey

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

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