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HARMONIC ELLIOTT WAVE

Friday, February 25, 2011

More of the same…

Yesterday saw a more uniform decline in the Dollar, or just about. It wasn’t quite as planned but the day confirmed USDJPY as having joined the central bearish theme and also that USDCHF has a more direct route lower also. There’s still more to go with, of course, the occasional pullback.

In fact I expect today to be somewhat similar with the first reaction to be a correction higher but without too much power and followed by another leg lower for the Dollar. This should lead to a break above the 1.3860 high but which is not expected to be sustained and instead trigger a deeper correction so over the coming week the Dollar should look a little firmer.

USDJPY has confirmed its association with losses and does seem destined to retest the 80.23 low. It should stall just above – or even just below – but I doubt we’ll see new historic lows just at this point. It should happen later though.

This has provided a weaker EURJPY. It still seems to be somewhat supported but unless it can recover firmly the downside is beginning to look a lot more vulnerable… We still need to exercise some short term care here but I feel this should get resolved before too long.

Just one final word on GBPUSD. It did extend losses as outlined in the downside scenario yesterday. However, I can’t see any particular strong basing information from momentum. It really does need to remain above 1.6084 otherwise there seems to be risk of a stronger drop…

Have a great weekend
Ian Copsey

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