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HARMONIC ELLIOTT WAVE

Tuesday, January 4, 2011

Still not 100% clear but the Dollar upside does seem favored…

Some of yesterday went much better than I had expected for the first day back... I can’t see that there is a totally confirmed Dollar bullish signal at the moment and in some cases there is still a bearish argument, but I do have a slight preference for Dollar gains. This is derived mainly from AUDUSD and to a certain extent GBPUSD which both appear to have had a more significant bearish move yesterday.

The other two Europeans are more mixed with EURUSD stalling perfectly at 1.3250 which could be interpreted as bullish while USDCHF really didn’t commit to either direction but does seem to have cornered itself in terms of causing a rather messy structure that tends to argue against losses…

It’s still going to be worth taking some care today but also worth noting that if I am right then the implication is quite strongly bullish Dollars as the situation in USDCHF does resemble a situation where it could completely recycle the decline from 1.0065…

We need to bring USDJPY into the equation also. It has squeezed a little higher than I actually feel comfortable with but with EURJPY having stalled perfectly at the 109.25 resistance I highlighted yesterday the two together, while yesterday’s highs hold, do still seem to point to lower levels although the targets for both EURJPY and USDJPY do appear to suggest that EURUSD shouldn’t really move very far from current levels. Clearly there is still some confusion and I feel we need watch this love-triangle to see which one cheats the most…

However, one thing about the USDJPY/EURJPY structure... If they both reach target then the corrections should be quite solid, USDJPY more so, and that still points to a lower EURUSD over the next week or two.

USDCAD seems to have found a temporary low… but I don’t see it holding for too long…

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. (+20 pips)

Good luck.
Ian Copsey

Early birds’ discount available for the first Harmonic Elliott Wave webinars available

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