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HARMONIC ELLIOTT WAVE

Wednesday, April 13, 2011

There are some interesting currency pair conjunctions that need to be resolved soon…

This is going to be hard to explain for those who don’t have knowledge of Harmonic Elliott Wave and price structure, but I’ll do my best…

First, USDJPY and EURJPY bounced nicely from around the right support levels – just a few points awry. Now these support levels, if the count is correct, imply rallies to new highs. We have seen that already occur in EURUSD so this definitely has a bullish bias. USDJPY actually had a range and this does look like making a minor new low early today. Thus over the day, barring any break down of these supports the implication is bullish in both.

Now, I suggested yesterday that EURJPY may have seen its high. Indeed, the losses were quite impressive. However, one thing about the end of a directional move is that price will retrace to the area around the last correction and pullback. EURUSD dropped right through which opens the risk that what I thought was one wave may have been another. (That’s as plain as I can make it for non-Elliotticians…) Thus, we have this stand-off between bullish expectations in EURUSD and (later) USDJPY which tends to imply new highs.

I’ll add into the fray AUDUSD. This hasn’t even managed to get to the last key correction… It needs to extend losses quickly to satisfy this exceptionally common reaction else this will also rally. Thus tending towards an implied weak U.S. Dollar.

However, USDCHF is in a world of its own and looks to me as if it needs a fairly solid correction. Well, I’ll not get too bothered about that as it tends to go walkabouts on its own anyway… GBPUSD on the other hand is in its own personal world… I’m struggling with ratios here which are not really consistent with what I normally see and this tends to weaken confidence. However, my impression is more bullish but in what may well turn out to be a sideways consolidation.

To sum all that up… We need USDJPY to make only marginal new lows today and rally along with EURUSD to push the cross higher. If the Aussie joins in on a stronger recovery then the general impression is Dollar bearish today…

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

Good luck.
Ian Copsey

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