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HARMONIC ELLIOTT WAVE

Thursday, November 18, 2010

Slow correction but the evidence still appears to point to a higher Dollar still

I was quite encouraged with yesterday’s move, apart from the fact the correction took all day to reach the retracement targets, but with all but USDJPY of the Dollar-currency pairs stalling at the right areas it provides greater confidence in the overall structures. Therefore the basic assumption of further gains today does appear to be valid. If not, we have great break levels…

Having taken a longer look at the daily charts all round yesterday I am coming to the conclusion that this may yet still be just a deeper retracement within the larger weekly Dollar downtrend. There are a few technical reasons for this in terms of price development and if I can venture into the realms of Elliott Wave the issue for me is alternation. For non-Elliott Wavers this is an observation, though not cast iron, which suggests that within the 2 corrective waves between 3 directional waves there should be one that is deeper than the other.

Looking at the hourly decline in EURUSD the retracements have all been shallow which tends to push the risk towards a corrective structure. Equally, looking at the daily decline from 1.1730 USDCHF the same is the case – but the move higher now appears to be a deeper pullback within the second corrective structure. Potentially another indication is yesterday’s failure for USDJPY to push above the 83.58 high, this being a corrective retracement area. However, this still may not be the final corrective high.

So the underlying message for now is basically the same as yesterday. Continue to favor the Dollar upside for now. There does seem to be further to go but I hazard a guess this could be quite choppy. Keep yesterday’s Dollar corrective lows, or around there, as the points that could generate resumption of Dollar losses. At this point though I still feel short term momentum remains higher.

Today’s free analysis is for EURUSD and can be found on http://www.fx-forecaster.com/DailyForecast.html along with yesterday’s Trader Package Review & Trade Set up report. (+45 pips)

Good luck
Ian Copsey

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

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