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HARMONIC ELLIOTT WAVE

Monday, April 25, 2011

Early risk is a slightly deeper correction/consolidation, later resumption of Dollar losses…

I was mostly satisfied with Thursday’s moves with the levels reached in EURUSD and USDCHF were pretty much spot on. GBPUSD was a bit stronger than I had expected but in the right direction overall. It didn’t take an analyst to see that Friday would see tight range trading…

So, with weekend over and dust and cobwebs still need to be shaken off, the early part of the day may well continue pretty subdued. From what I’ve seen already it looks like EURUSD should do very little until European trading and overall I feel that we should see a slightly deeper pullback after Thursday’s Dollar losses. However, don’t get too comfortable with the pullback. We are at a stage in the wave structure where the “rules” are fairly lax and the downtrend able to resume at any point. What is unclear is whether the rather frenetic losses will continue at the same pace or slow right down…

Thus, while I have a preference for a mildly deeper correction, do not fight the Dollar downtrend.

Elsewhere USDJPY slipped further which is beginning to concern. Well, perhaps it’s not as I do have a bearish view through to the end of the year as you probably know. Right at this point the key point is deciding whether the 85.51 high completed the correction or whether there’s a minor new high to go. In saying this I am very aware of my outlook which calls for a fairly solid Dollar correction higher once the current decline has ended. The correction could last into June or July. Therefore there is a certain conflict between USDJPY and the Europeans. Key will be how EURJPY reacts. At this point the cross needs to rally to maintain the bullish structure. If this begins to break down then we could have a rather soggy outlook for them both…

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

Have a profitable week
Ian Copsey

HARMONIC ELLIOTT WAVE FORECASTS NOW AVAILABLE FOR U.S. INDICES

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