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HARMONIC ELLIOTT WAVE

Tuesday, December 21, 2010

A little bit more of the same…

Please note The Daily Forecaster will take a break from the 24th December and return on the 3rd January

The week did start with early corrective price action and saw losses in GBPUSD and EURUSD but not with the aggression I had expected and it seems as if the market has slowed to a crawl. I guess we can’t be too surprised with that since the market needs a catalyst to prod them from the pre-Xmas preference for slumber. Having gone through the charts I tend to feel there is risk of a similar sort of day.

GBPUSD didn’t reach its target and from yesterday’s high I have problems in identifying corresponding targets. I don’t think USDCHF has quite finished its pullback either. To top it all EURJPY, while it did decline, has done so in a manner which looks like it has made a slightly stronger decline in the current sector of the structure. This does look like extending a little further but a deeper pullback will then be due. Given USDJPY has entered into its own time warp the implication I see in general is for EURUSD to probably dip a little to generate the anticipated extension in EURJPY but then see a correction higher. That seems to suit all the currency pairs.

I should add a little more on USDJPY. The upside targets also haven’t been seen in the larger picture and I still have a preference to see one more rally. However, it appears to have dipped too far for this to occur directly and it has left me with an impression that we may see a larger consolidation develop. This could still see losses but most likely in an erratic manner. I think we can write this one off until next week.

It’ll mean just a bit more patience for the EURUSD & GBPUSD downside – USDCHF upside – to develop but I still have a feeling we shall see it this side of the Xmas break and could be quite aggressive.

AUDUSD has also begun to look more balanced. I’m open to both sides of the market – probably favor consolidation more. USDCAD is approaching key resistance that should highlight extension or reversal… Take care with this loonie…

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. (+45 pips)

Good luck
Ian Copsey

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

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