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HARMONIC ELLIOTT WAVE

Tuesday, May 3, 2011

… and I’m still looking for the Dollar to correct higher…

What a nasty mess of a day… and almost a complete failure in yesterday’s analysis. Normally that suggests I need to completely change tack and adjust the overall outlook but at this stage I feel yesterday’s confusion is probably more a reflection of corrective price action. It is… well… a bit of a mess.

The bottom line remains the same. I feel we are within reach of what should be a final decline in some rather extended daily losses that should cause the most solid correction higher for the Dollar in over 6 months. You’ll note that I used the work “correction” as I am not in the “Euro goes to parity” group… yet… That’ll take a few years more after the next round of Dollar losses...

So currently I feel it’s more a case of minor adjustments and within that there still seems room for a modest correction higher for the Dollar. The fact that GBPUSD did not make a new high yesterday and perhaps strangely enough that USDJPY did not lose out as much as I had expected, does support the case. However, there are still some potential minor shenanigans as I’d still prefer USDJPY and USDCHF to make minor new lows before their pullbacks.

Interestingly, I note that the U.S. Indices topped out in the areas I had suggested and do need to extend their minor corrections over today & possibly into tomorrow before they take another step higher towards their key daily targets. Thus, the loose correlation between the Dollar and equities remains intact.

Thus, today is another day to take care. I sense there could be a repeat of yesterday in terms of the confusion and perhaps closure to the Dollar bullish correction by tomorrow. Out of interest watch EURJPY around the important 119.43-79 area…

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

Good luck
Ian Copsey

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

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