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HARMONIC ELLIOTT WAVE

Sunday, May 8, 2011

It doesn’t seem far from a Euro low now…

Well… that didn’t last long… what a fickle market… Just as it seemed the market only had eyes for the Euro it made a complete about turn in a game of pass the parcel as it suddenly became the most undesirable currency on the planet… While the Dollar made gains elsewhere too they were nowhere close to the extent seen against the Euro. But just as it seems it is the most unwanted, indeed should see the move extend further it has almost reached its target and should do so either today or Tuesday.

I have had a few people questioning whether this is the start of a move down to parity. It’s really far too early to start thinking about this to be honest but I strongly doubt it. As I have mentioned on occasions I have always been Dollar bearish into the end of this year – maybe slightly into next – and I still feel there are significant losses to come into the major multi-year Dollar cycle low. Thus this current move should be just a correction. Given the time frame for the Dollar to resume its rally appears to be around the end of June that actually leaves a lot of time for a deep correction and a second leg lower. The alternative may even be a long sideways correction. Thus we’ll have to be on our toes to observe how this develops.

As for today I still see Dollar gains developing across the board. There’s some risk of an early dip but then pullback before the stronger move develops. I suspect it could be quite strong when the follow-through finally develops. Thus, take care.

Elsewhere I also feel EURJPY is not far from its low also, and may even be the lowest it will be for a while… At this point I am still considering this as a correction lower. In the larger picture we could treat the 123.31 high as the final high but this structure doesn’t rule out one more high above 123.31. That’s going to be one to watch…

Have a profitable week
Ian Copsey

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