Pages

HARMONIC ELLIOTT WAVE

Friday, December 17, 2010

Today may well be similar to yesterday

Yesterday went pretty much to plan, perhaps a bit slower than I had anticipated, but overall we saw the Dollar manage a pullback. As the headline says, today could be similar. I do feel we’ll see some Dollar losses against the Europeans but I’m not expecting these to be sustainable which will leave us still with the fine balance between stronger gains or a stronger reversal lower.

I do admit that I still have the stubborn preference for the Dollar to return to the downside, perhaps by the end of the day or over next week. I’ll still watch to see what happens today but the signs I see tend to support that view. Things can morph of course and the underlying momentum picture is still Dollar bullish which is why I doubt we’ll see any early resolution to the balance.

As a broad outline, to try and judge how the two alternatives may develop, the expectation I have is for the first part of today to be Dollar bearish but not excessively. It will be how it then reacts from those lows which will determine the final outcome. A ragged and unconvincing Dollar rally that fails below yesterday’s highs, probably lasting for the rest of the day will increase the risk of a reversal back lower for losses into the last week of the year. If the reaction is stronger then any breach of those highs will send it on an extension lower but don’t expect any breach of the 1.2968 low just yet…

Another development that pushes more to the Dollar bear camp is USDJPY. Its failure to overcome the 84.50 high and the deeper retracement appears to reflect the correction which I had expected from the 84.80 area. That being the case, it will imply a much lower final target and a much sooner reversal lower. That seems to be backed up by EURJPY which has crept lower and seems poised after the 112.18 high to extend losses. The cross can still wriggle & jiggle a little before it goes down but I can’t see this lasting for too long… Thus beware, this final high in USDJPY does look terminal…

Today’s free analysis is for EURJPY and can be found on http://www.fx-forecaster.com/DailyForecast.html along with yesterday’s Trader Package Review & Trade Set up report. (+50 pips)

Have a great weekend
Ian Copsey

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

No comments:

Post a Comment