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HARMONIC ELLIOTT WAVE

Monday, March 28, 2011

Dollar strength back on track it seems…

It seems I clearly made an error in judging the original decline from the 1.4247 EURUSD high as Friday saw a fairly persistent return to losses which have dropped below last week’s 1.4052 low already. After finding USDCHF hadn’t really inspired on the upside it actually found its legs and generated the strongest single day rally since the 0.8918 low. The third European also followed suit in seeing losses that are once again poised just above the 1.5976 low.

The news is that none of them appear to have completed their moves and while corrections are expected soon I still feel there’ll be follow-through over the next couple of days at least.

Even USDJPY managed to drag itself out of its drugged and coma-like state and on the 5-minute chart looked like it had shot out from the starting gate with great energy and venom. Of course, it was only 50 points… and basically insufficient to really make much headway which still leaves it vulnerable to the downside still. If I have any real view here then it is that we are probably not yet seeing the follow-through higher but could still easily dip back below the 80.65 low seen after the 81.98 high. This is probably echoed in EURJPY which, although it did manage to rustle up some strength, seems to have failed in doing enough to generate new highs at this point and may well have more downside potential later today.

The only pair that bucked the trend was AUDUSD which exceeded my initial upside targets and does look set for additional gains but probably needing a pullback before long. Thus, for today I feel the upside is limited.

Therefore, as we begin the week I feel we should be concentrating more on Dollar-Europe which still appears to have further gains in store for the Dollar…

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

Have a profitable week.
Ian Copsey

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