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HARMONIC ELLIOTT WAVE

Tuesday, March 1, 2011

Overall the Dollar is due a mild correction before losses resume…

I think today could be quite interesting. I guess that depends on what is considered “interesting” but for me the picture that emerged yesterday both confirmed the Dollar weakness but at the same time the moves were not uniformly so. Both GBPUSD and EURUSD displayed strength while USDCHF and USDJPY languished somewhat, unable to take advantage of the Dollar weakness seen elsewhere…

It does seem to point to a correction in the Dollar. The issue here is whether the moves will be uniform or not through the 4 majors. I reckon they’ll not… EURUSD does still seem to have potential for push above yesterday’s high but I don’t think it’ll last for long. However, it should be the only pair that sees the Dollar weak. GBPUSD has returned like a magnet to the 1.6277 area. Will it break or not? Yes… and no… More accurately perhaps is “not yet…” However, when it does the implication I see is really quite bullish…

As for USDJPY and USDCHF, yesterday’s lack of commitment to the downside is beginning to suggest a deeper pullback. The ideal across the majors is for EURUSD to push to marginal new highs followed by a correlated correction higher in the Dollar.

This should see EURJPY push higher initially also but not too strongly at this point. A correction will be then due but within what still appears to be a final push back towards the 115.67 high. I doubt we’ll see a breach of this high, or if it does then it’ll be brief. However, that should be tale for the rest of the week rather than today.

AUDUSD is still on the bullish track but laboring. For the moment I favor the upside but I don’t think it’s going to be a clean move. Likewise, USDCAD is likewise on a bearish path and reached the 0.9710 intermediate target I highlighted yesterday. Here also a pullback is required before it can extend losses…

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

Good luck
Ian Copsey

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