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HARMONIC ELLIOTT WAVE

Thursday, January 13, 2011

Oh..!

Things were looking good for a while… Most currency pairs were basically behaving themselves… suddenly we had a group tantrum. Actually, I sat down with the assumption that I’d argue for Dollar gains once more. I ended the analysis with a very different impression… There are quite a few clues all supporting a Dollar bearish stance for the coming days.

Let’s start with the issue I have been pointing out for the past few days; EURUSD hadn’t seen a deep enough pullback to confirm that we were in a firm downtrend. I thought I had cornered that one when it bounced lower from 1.3045… Nope… it decided to extend its gains and far beyond what it should to be just a correction. Well, the only other interpretation of a fall with shallow pullbacks all through – a correction. The rather alarming conclusion is that we’re going to see the correction recycle back to 1.3497 and maybe just above…

Secondly: the rally in EURJPY. I had begun to consider the source of the strength should come from USDJPY although did have a slight nag in the back of my mind concerned about EURUSD losses making life tough… Well, this seems to be heading back to 110.23 again…

Third: I have been attempting to identify a major low in AUDUSD which did seem at odds with the U.S. Dollar bullish view. Well, its rally yesterday appears to have suggested we have seen the low and that implies new highs…

Fourth: USDCHF – as much as I wanted to call this higher the 4-hour bearish divergence has strengthened. I feel this will be just a correction and will need to be deep if the recycling to 1.0065 and above is still possible.

Fifth: The structure in GBPUSD is hard to fit into a correction and looks more bullish – even to the extent of possibly having found a major low. That I shall be more cautious with though…

The day should start with a correction to yesterday’s Dollar losses but watch for the key resistance areas to ensure that my prognosis is correct. However, I find it hard to think otherwise at this moment…

Today’s free analysis is for EURUSD and can be found on http://www.fx-forecaster.com/DailyForecast.html along with yesterday’s Trader Package Review & Trade Set up report. (+105 pips)

Good luck
Ian Copsey

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