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HARMONIC ELLIOTT WAVE

Wednesday, March 30, 2011

More reason to be cautious today…

Not a good day yesterday… and not a lot went right which means I’m not a happy bunny today…

Where do I start? Well, I’d rather forget EURUSD… but clearly I can’t. The extension of the gains to 1.4148 was clearly not on the agenda but now I have to work out what to do with this. Frankly the balance between the Europeans has become somewhat shaky for the moment and the air needs to be cleared. I still have a firm view on what I feel is the correction higher in USDCHF and I don’t think this is complete yet. It still has a little higher to go I think but I’m not sure this will be direct which suggests a rather scrappy ending to the pullback. However, once complete it should sink to new lows…

So will there be any correlation with EURUSD when the Swissie finally declines? To be honest the once high probability of correlation has descended into a rather shaky marital relationship. Sometimes they love it other and sometimes they can’t bear the sight of each other. It’s not something that is predictable any more.

So what of GBPUSD? Well, while it didn’t extend its recovery yesterday, nor did it complete its own pullback and I tend to feel this should happen today. Once that is complete I feel that EURUSD can join in with the anticipated decline… This could keep EURUSD rather a guessing game for today…

What did develop at long last after a long time of waiting was a directional move in both USDJPY and EURJPY. It comes as a relief to actually get some price development with which to work on wave relationships… I still have higher highs in both to come. However, equally both appear to require a pullback before reaching the expected targets. The eventual outcome is that once the corrections and new highs have been seen the next reaction should be deeper corrections for them both.

So today looks as if the main risk is still volatility in both Europeans and the JPY pairs. Be aware of the medium term targets and implications to guide during this process…

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

Good luck.
Ian Copsey

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