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HARMONIC ELLIOTT WAVE

Tuesday, November 30, 2010

The outlook seems a bit more mixed today…

Overall yesterday was quite a successful one with Dollar gains seen broadly across the board. Some targets were met and some still seem to have a little further to go. If I have all the moves correct then there certainly looks to be room for some rather disjointed developments today. EURUSD, while reaching a rough area which could see a larger reversal still seems to have further downside risk. However, while I called for the 1.5527-35 area in GBPUSD as a low yesterday, which hit reached to perfection, it implies a pullback higher…

So we have a dichotomy in terms of correlation between the Europeans. Well, I think we can take USDCHF out of that equation at the moment as it seems to prefer taking its own route at this time. That does leave a basically bullish GBPUSD view versus a bearish EURUSD… It’s never comforting to have this type of conflict and certainly it would be best to be aware of the risks overflowing from one to the other, but for now I do prefer these two taking separate routes.

USDJPY also managed to clamber its way higher. I’d like to think it could make another minor new high but momentum here is looking a bit strained. There are bearish divergences developing right from the hourly chart through to daily… The daily divergence would require a break below the 82.77 low but I think this is doubtful for now. I still prefer the scenario of seeing a pullback soon – and as I mentioned, preferably from a minor new high – but I feel there is still one more leg higher in it after this correction.

This tends to fit in with all the majors which do still seem to all require a new Dollar high either by late this week but probably into next.

AUDUSD fits that description too – as well as USDCAD… I do see signs that by the middle of next week approximately we should start to see the Dollar fall back lower and in what could be quite a deep retracement through to the end of the year.

For today, just keep an eye out on the key levels in EURUSD & GBPUSD given the apparent requirement for them to take separate routes versus the Dollar…

Today’s free analysis is for USDJPY 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)

Good luck
Ian Copsey

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

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