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HARMONIC ELLIOTT WAVE

Tuesday, April 12, 2011

EURJPY appears to have topped – the Europeans still indecisive…

It was hardly a frenetic start to the week but perhaps EURJPY has found itself a top for now… Starting with this cross it does look like it has begun a deeper pullback that should keep it on the defensive for most – if not all – of the rest of this week. I can’t say the same precisely on USDJPY. I certainly don’t think it has completed its correction yet so I can’t really see a repeat of the one-way rally at this point…

Right… the Europeans. They weren’t too exciting yesterday were they? First, I don’t think EURUSD is done on the upside just yet and I don’t think there’s too much room on the downside for the correction from yesterday’s early high. This should spurn a further rally that should get to the top half of the 1.45’s at least. Beyond that I’d rather look hard at momentum to see what it’s like at that time.

The question is whether this will help the Dollar weaken against the other two Europeans. USDCHF – yes, I can see that. GBPUSD… well, I’m not quite so confident but if this is to go higher we probably need an outside day with an early break of yesterday’s low and follow-through higher to provide a temporary high. However, I can see the Dollar losses getting carried away at this point either so the basic theme appears to be break-reverse-break-reverse… (no jokes about women driving please…)

If the Aussie can be used as a proxy for the Europeans – which is not always the case – I see a similar fate for it today also. The pullback from yesterday’s high is not far from the target retracement and should provoke another new high. However, that then should mean we get a deeper pullback.

If I have any broad message, then that’s it. We are due deeper corrections – but first the risk of new Dollar lows… Take care not to get whipped at either extreme.

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

Good luck.
Ian Copsey

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