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HARMONIC ELLIOTT WAVE

Thursday, December 23, 2010

While there is still risk of a correction the current trend should continue through New Year

Please note The Daily Forecaster will return on the 3rd January


These past few days have sure been testing. Corrections have never really been able to develop to their full and each day we have seen the directional moves extend. It has been very choppy and I don’t see an end to this today or tomorrow. However, the main Dollar bullish expectations for EURUSD and GBPUSD remain on track – even if it’s a meandering path. Rather obtusely USDCHF and USDJPY have taken exactly the opposite path, seeing the Dollar lose ground bit by bit although I feel these are probably close to a decent bounce.

If I extend my horizon through to the end of the year I feel the European trends will likely extend further although by early next year a correction will no doubt be due. I am still aware of a slightly duality for USDJPY but the 82.63-93 area seems to be fairly important. I’ll not get too bearish until this area breaks.

The anticipated decline in EURUSD should enable EURJPY to retain its general decline and this should see quite some losses. That is the one doubt I have about USDJPY as the anticipated eventual target is closer to 100. It may be a case of timing and how deep retracements develop but it does suggest we do have to be aware of the critical USDJPY support.

AUDUSD may threaten a period of consolidation even if the current rally has been sustained even in the face of bearish divergences. This one’s a tough call but I find it hard to see a constructive bullish structure here. USDCAD… It’s still in the larger range that has been around for around 9 months now. Perhaps it’s not rocket science but we need a break of the 0.9929-77 lows to trigger losses and until then the chance of further consolidation remains. However, do watch out, as if we see declines today the break lower could become a reality.

May I wish everyone a splendid festive season and happiness and health for the coming year.

Today’s free analysis is for USDCHF and can be found on http://www.fx-forecaster.com/DailyForecast.html along with yesterday’s Trader Package Review & Trade Set up report. (+0 pips)

Ian Copsey

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

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