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HARMONIC ELLIOTT WAVE

Wednesday, February 9, 2011

I think today could be important in defining the next move…

It was another day of only partial success. While EURUSD made gains over the day they were grudging. Elsewhere the Dollar slipped against the Yen but gained against the Swissie while GBPUSD hiccupped and slipped to a minor new low. Even AUDUSD, which I had thought to have a decent bullish structure, made heave work of gains and actually subsided into a game of seesawing within range.

The sum total is a mixed bag of signals that really doesn’t confirm Dollar losses, but then I don’t think they confirm gains either. For a start USDCHF seems to be happily edging higher but seemingly within the larger range that I highlighted yesterday. If anything, on its own, it tends to confirm Dollar losses but not particularly quickly with another leg higher still to come.

What of EURUSD? Well, it struggled higher rather than brazenly signal a resumption of the upside. It has left me sitting on the fence, particularly with GBPUSD having dipped below 1.6036 and beginning to look a little vulnerable.

USDJPY saw a sell off but appears to have steadied itself and does look a little more bullish. This is partly confirmed by EURJPY but it’s recovery has been rather limp and only serves to make me cautious about the next move.

The bottom line is that there is little – if any room – on the Dollar’s upside available without pushing it towards a stronger bullish structure. Therefore I feel that what happens today could prove to be important. I suspect broad Dollar strength today so the important issue will be just whether the market can take advantage of this to penetrate key resistance levels all round.

It’s a day to be cautious so take care…

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

Good luck
Ian Copsey

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