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HARMONIC ELLIOTT WAVE

Friday, March 18, 2011

Just a little more and we’ll start seeing some decent movement…

It was difficult to be exact yesterday as there were so many possible permutations to consider. However, broadly things seemed to develop as expected and brings with it a greater sense of confidence in what is currently happening. Yesterday’s key movers – USDJPY, EURJPY and USDCHF all lapsed into quivering wrecks and saw severely reduced ranges over the rest of the day. This allowed EURUSD and GBPUSD to express themselves more and seem to be heading back towards a likely return to correlation, probably at some point later today.

The rally in EURUSD may look as if it’s developing back into an uptrend but from what I can see the chances are limited. I am still basically Dollar bearish but can’t see that this trend will resume just yet. I am more in favor of a recycling in EURUSD and GBPUSD that should allow USDCHF to recover a little deeper to complete its correction from yesterday’s low. Once this occurs then the Dollar can see losses once again.

This tends to dovetail with gold and U.S. equities. Gold still has a little further to rally to a point where a bigger correction lower should develop. I have placed a call for a low in the S&P 500 around 1,240-45 that should allow the uptrend to resume. (http://stocktwits.com/HarmonicElliottWave) A lower Dollar will help in this cause.

USDJPY has shifted strongly higher as I write and this is clearly generates further need for greater attention. I’m not convinced this is going to begin soaring again but turn into a sideways consolidation. The moves are so sharp that for the moment it is probably safer to stay clear until normal service is resumes…

So for today keep your eyes out for the top in EURUSD and GBPUSD that should lead to a recycling lower and for USDCHF to rally.

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

Have a great weekend.
Ian Copsey

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