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HARMONIC ELLIOTT WAVE

Thursday, December 16, 2010

It seems to me that we are at a critical point between bullish & bearish…

Well, that wasn’t choppy at all… The declines in GBPUSD and EURUSD were much deeper than I had been expecting and have come tantalizingly close to confirming a resumption of the underlying Dollar uptrend. It would be very easy to assume that this was the case… perhaps it is… but after a lot of frowning, burrowing of brows and measuring I’m not really convinced this is the case…

We should remember that this is December. I have noted a higher than normal instances of extreme projections that are not so common. This appears to be a result of the lack of liquidity forcing the game of pass-the-position to accelerate with limited corrections.

Let’s just say that I feel it would be best not to make a final decision. At the very least I feel that a pullback is due from those declines and the key will be the critical areas that would confirm extension of Dollar gains… or on breach would cause the Dollar to head lower again.

For other currency pairs such as AUDUSD, USDCAD and indeed, USDJPY the reactions have been far more conservative and actually tend to fit better with a continuation of their respective trends. In particular USDJPY is working exceptionally well with the current move higher and brings with it more confidence with the structure. For that reason I shall err on the side of the Dollar resuming losses but will highlight the areas we need watch for that could throw back the idea in my face.

Thus, keep your minds open to identify what is happening and remember Xmas is just 6 ½ trading days away…

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

Good luck
Ian Copsey

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

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