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HARMONIC ELLIOTT WAVE

Tuesday, April 5, 2011

It looks as if we could see slow motion this week…

Yesterday’s moves weren’t exactly as I had expected but not too different either. The limited upside in EURUSD before the pullback was rather a disappointment but not drastically different to the ideal. The same could be said of GBPUSD. However, with both rallies mildly limited it does tend to point to a lower upside target which could be reached by tomorrow or Thursday at the very latest. This is the one I would anticipate causing a much deeper correction that could last a long time.

If that is the case, then we’ll need to watch ourselves in GBPUSD. The adjusted outlook was for a new high above 1.6400. However, if we take both EURUSD and GBPUSD as being correlated (not necessarily a foregone conclusion) then a deeper correction in EURUSD could mean that we are currently only looking at a pullback in GBPUSD. However, for the moment I remain cautiously bullish and will look at the structure of this rally to judge whether it’s corrective or otherwise…

USDCHF has drifted lower and should make another attempt lower later today. However, at this point it does look more like a correction. It does seem as if the 1.1819 low was a final stalling point for this decline. I will expect it to move lower later this year but for now the implication does seem bullish overall – in a correction higher.

USDJPY and EURJPY declined as expected and this should continue. There’s still some way to go for this.

AUDUSD looks like forming a high soon as well. I don’t think yesterday provided the final high of this part of the rally but should do so over today or tomorrow. USDCAD edged lower and bounced. However, this recovery doesn’t seem to be constructive and from the look of momentum we do still seem to need one more low to develop before the correction recycles…

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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