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HARMONIC ELLIOTT WAVE

Tuesday, March 22, 2011

Overall I feel the Dollar should display some strength – but not uniformly…

It was rather a strange day yesterday. In some parts it developed in the general manner I had expected but not really adhering to levels that well. In other parts it failed to ignite any significant movement. Mostly it could be described as quite a dull day.

The general impression I’m getting is that the Dollar appears to be supported in general. This wasn’t reflected in EURUSD, GBPUSD and AUDUSD but as described yesterday, I’m looking for a top to develop in the first two pairs and was surprised by the strength shown by the Aussie. However, I’m still adamant that USDCHF needs to retrace higher and edging more to the bullish side in USDJPY. The bigger issue for me is tying all these together in a manner which generates the least conflict in the general balance of things.

I should also mention that on reworking EURJPY I can see a potentially very bullish outcome. This may be assisted at first by a higher EURUSD but assuming I’m right that it won’t be sustainable then USDJPY has to take on more of the donkey work to keep the cross afloat.

So as a broad guideline to how I see this working I remain bullish EURUSD in the short term – maybe even just today – but which should then be followed by broad Dollar strength. This should come with a firmer USDJPY as there should be a little higher to come here too – along therefore with the cross – but then the JPY pairs should correct lower also.

There will still be hurdles to overcome as I still have USDCHF dipping to new lows but I’ll tackle that once we’ve seen the expected retracement higher first.

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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