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HARMONIC ELLIOTT WAVE

Wednesday, February 2, 2011

No Dollar low in sight… well, not yet…

All change… Yesterday’s Dollar losses are enough to break the structure I had held for some while and could well be the beginning of the end. The end should be some where around the end of the year now. However, that’s not to say that we’ll not see any correction but I suspect with the monthly cycles being in the final months of what may be a 20-25 year bearish cycle it tends to point to a pretty luckless year for the Dollar.

Well, that’s still a little way beyond the current position and first things first we need handle this current move. I suspect that we will eventually retest somewhere around the 1.4281 high EURUSD before a larger correction. Perhaps to put that in perspective also we should see an intermediate pullback before too long now and it’s from that (anticipated) corrective low that we’ll end up closer to 1.4281…

Yesterday probably saw the most aggressive part of the move. There’s still a little way to go but with greater risk of a less direct move. GBPUSD has confirmed this also and that isn’t too far from testing last year’s 1.6298 high. That shouldn’t be the last stop either… The last bastions of defending a Dollar bullish correction – USDCHF and USDJPY – also lost sufficient ground for me to consider that the downside is developing directly.

However, in all the structures there is a defined limit for the current Dollar losses and I suspect that these may be achieved by next month – latest into April. Thus, it is from the lows expected then that a pullback is possible.

Both AUDUSD and USDCAD had Dollar bearish days and appear to confirm exactly the same picture. It’s more a matter of navigating the near term.

That leaves EURJPY which was sidelined somewhat as the Dollar moves took over. I still cautiously see this as bullish but would actually prefer a dip first so yesterday’s strength was rather against my expectations. While the Dollar moves dominate it may be better to observe rather than dabble…

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

Good luck
Ian Copsey

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