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HARMONIC ELLIOTT WAVE

Wednesday, January 12, 2011

Just a little deeper and the Euro can extend its losses…

Yesterday’s basic message of messy consolidation proved correct in all but AUDUSD and perhaps EURJPY. Has the consolidation finished? Not quite I think…

The expectation on EURUSD edging higher still is based on a bit of retrospective fitting and that’s the bit that concerns me. If nothing else the slightly longer lasting pullback has provided a break to the relentless decline and does begin to point to an eventual halt and pullback. The question that remains is just where the pullback stops – which in turn will provide some stronger information on how far the current larger decline will stall.

GBPUSD found a top right in the resistance zone identified and assuming this holds then it’ll reverse back into range. Even if it breaks above yesterday’s high – and then the 1.5664 high I don’t see a runaway rally. I still expect losses here too. USDCHF pushed to new highs. It doesn’t posses a particularly tidy or clear structure but overall does fit into the general bullish expectation. Ideally this should extend further but there are a few short term hurdles to overcome that could complicate matters… Work with the structural support & resistance I provide.

USDJPY stalled nicely in the right sort of support area and resumed with modest firmness. It should be due a pullback now but while this doesn’t drop too far it does seem to work well within a bullish structure. Probably we need a little patience here but I feel that when the break higher comes it will be with more vigor than see over the last few days.

One interesting point about JPY is the EURJPY cross… Its deeper pullback higher appears too much for an immediate bearish structure… and given that deep rally to 110.23 I’m even beginning to contemplate the possibility that we may not see a move below the 105.42 low… I do still feel the downside is probably in need of one more push lower but the strength shown recently is causing me a lot of structural issues within a bearish move… Take care here therefore…

AUDUSD needs to stall quickly. Maybe it found its final low yesterday but I wouldn’t rule out one more dip. USDCAD… more likely should see a recycling back to 1.0033-47 but not before pne more dip…

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. (+10 pips)

Good luck
Ian Copsey

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