Pages

HARMONIC ELLIOTT WAVE

Friday, November 19, 2010

Conflicts

This week has not been a good one. It seems I have been lagging the market rather than leading and that makes me glad the weekend has arrived. Yesterday’s Dollar losses were a risk I could see from the bullish divergences in EURUSD but those in USDCHF and GBPUSD were clearly not anticipated. Taking a step back, in many ways, as I pointed out, the 1.3447 EURUSD low is very much in line with my larger daily/weekly picture of strength. However, what clearly spoofed me yesterday was the fact that we had not seen a strong enough rally in USDCHF to satisfy a minimum daily correction there… The sharp push higher in the latter by the end of the day has actually confirmed that. As for GBPUSD – at this point I’m treating it as a correction with potential downside risk still to come. Whether this makes new lows or remains in a consolidation has yet to be seen but I do not rule this out.

It does look as if EURUSD is approaching a peak in the recovery so it actually suits the Dollar bullish picture expected in the other two Europeans so today should be mostly Dollar bullish. We shall have to see how this pans out as we get into next week as the ideal will be for EURUSD to generate a correction only while the other two risks minor new Dollar highs. If all this occurs next week then I feel the weekly Dollar bearish trend can continue. It could end up as quite a close call but like a stubborn mule I still see Dollar cycles as bearish.

USDJPY spent much of the day in consolidation but ended up at new highs. We are beginning to get bearish divergences here also so we should be aware of the downside risk that could emerge at any time. I do still see risk of another push higher, but the more this happens with sluggish momentum the stronger the risk of reversal lower.

Interestingly the combination of EURUSD and USDJPY has seen the cross rally quite constructively and has begun to resurrect the bullish preference I have had. However, it’s still early days and clearly we’re within the larger range. I can’t see excessive gains today and the proof of the pudding should come over the early days of next week. If I am correct in my bullish EURUSD preference and USDJPY remains sluggish on the downside the environment for further gains is most definitely possible.

So, today look for the final remnants of yesterday’s moves to die out and expect Dollar gains 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. (+70 pips)

Have a great weekend
Ian Copsey

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

No comments:

Post a Comment