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HARMONIC ELLIOTT WAVE

Thursday, February 3, 2011

The Dollar should remain under pressure

I can’t say yesterday’s analysis was that accurate. Instead it was a day of graft but not really seeing the recent Dollar losses coming under too much threat. Having made a retake on the situation my basic view remains unchanged but note a slightly different structural development than I had anticipated. The core larger Dollar bearish structure remains intact and with momentum regrouping following the stronger breaks I still feel we’ll see one more leg in the current decline before a slightly deeper and longer correction.

It’s this next correction that will test just how robust the Dollar decline is. I mentioned earlier in the week that the Dollar bearish cycles are in the final months of a mega-super-massive-extra multi-year decline that I estimate should arrive +/- 3-6 months around the turn of the year. If there is any chance of a brief reprieve then this will be it.

If not… and the way things are developing we’re going to see a pretty directional move for the rest of the year. What will cause it? Why would I know? I never look at the fundamentals as they tend to lag… Call them a self-fulfilling prophecy if you like… but retrospectively self fulfilling… (Just a technical analyst’s perspective of course!)

So today I feel will be mainly Dollar bearish as the corrections look complete. I have some doubts about USDCHF but even this could still see a marginal new low but then pullback higher in a recycling. Elsewhere the situation is pretty uniform in terms of needing another dip. This should keep EURJPY on the defensive, and I’m even open to one more minor push higher but within the boundaries of a deeper pullback lower. This one is more of a flip of the coin but I still feel one way or the other we should see a lower low that the 111.41 seen thus far.

Today’s free analysis is for USDJPY and can be found on http://www.fx-forecaster.com/DailyForecast.html.

Good luck
Ian Copsey

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