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HARMONIC ELLIOTT WAVE

Monday, November 29, 2010

We’re at make or break here … but momentum seems to favor further Dollar gains overall…

Dollar gains were seen as expected on Friday. When going through the weekly indicator review (http://www.fx-forecaster.com/files/Weekly_Review_Support_Resistance_26th_November_2010.pdf) the general impression I received was an overall Dollar bullish one. Momentum in the longer term charts seemed to provide a more bullish outlook. From a price perspective we have reached key resistance levels and I do feel that there is risk of a potential correction at least and just how far that moves will determine the larger trend. As I mentioned, this does seem to have a more Dollar bullish bias.

It’s not impossible that this correction is already complete and therefore we’re going to have to watch the next break closely. From what I can see, the early risk is higher but I’m not convinced at this point that we’ll see direct follow-through and suspect we could see a second attempt at a correction over the course of today. Either way, if I cam correct on the extension of Dollar gains then it should be quite a solid move lasting 2-3 days. Even then I don’t think it will provide the final high and there’ll be more to come either by late in the week or into next week.

I will detail the levels to watch out for that would indicate a reversal lower again within today’s analysis.

I did mention on Friday that we should at least see a deeper correction. If that is the case, then the reversal should come later today. However, having looked over the charts this morning and seeing the damage generated on Friday I am considering an alternative that would maintain more direct Dollar gains and probably to the mid 1.20’s EURUSD. Still, there are a few hurdles to overcome but the next few days should clarify the underlying structure.

USDJPY has extended gains and I’m beginning to consider slightly higher targets here also. It is moving more slowly and I don’t expect this to change but even with a more bullish view I don’t think this is going to generate any surge and potentially we’ll see this higher target reached as EURUSD reaches the mid 1.20’s target area. Bother should cause a deeper reaction with USDJPY most likely then to find a new historic low. That should keep EURUSD on the bearish side but looks as if the route will be a messy one.

Today’s free analysis is for EURJPY and can be found on http://www.fx-forecaster.com/DailyForecast.html along with Friday’s Trader Package Review & Trade Set up report. (+30 pips)

Have a profitable week
Ian Copsey

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

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