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HARMONIC ELLIOTT WAVE

Thursday, May 19, 2011

The Dollar should resume its corrective gains soon

There was a mixed bag of results yesterday. The key element through them all was that key Dollar supports remain intact. EURUSD rallied as expected, USDCHF pressured its support which held well while GBPUSD actually caved in and resumed its decline more directly than expected. Probably it’s GBPUSD that has led the way this time and today should sort out the remainder to provide the Dollar with all round strength. Indeed, the only major currency I can see which has a little Dollar downside left is EURUSD and that appears pretty close to its peak now so I’ll be expecting losses to develop by the end of the day.

Just to add a little more in the larger picture, while I am expecting the Dollar to resume its corrective rally, I feel the word “corrective” needs to be stressed. I can’t see an awfully big move coming up and have Dollar resistance levels not a million points away… Therefore, I don’t think this is a time for expecting a strong trending move. Indeed, if I am right in looking for a final wave higher for the Dollar we’ll have to be aware of some choppy resolution which often accompanies such terminal moves. Therefore, take care.

I should add an additional note on USDJPY and its cross. I began to feel there may be an argument for greater strength. Its early upside failure yesterday has dented that considerably but still the upside is currently the favored side and it should be more a question of just where this pullback stalls. EURJPY also made gains but appears to have taken a structure that is more choppy and therefore probably a corrective one. There may be some more upside to come but the risks for increased choppiness is increasing.

AUDUSD looks to have topped out for now and should therefore resume losses soon. USDCAD may have a little more in a correction lower but this too should enter its final corrective leg higher soon.

Today’s free analysis is for USDCAD 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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