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HARMONIC ELLIOTT WAVE

Tuesday, May 24, 2011

Still more Dollar gains to come…

The Dollar started the week on a very strong note, in particular against the Euro which dived in pretty much straight line to just under 1.40 before pulling back. I really can’t see the correction lasting too much longer – perhaps into European trading – before the downside extends further. This does look like dragging the other Europeans behind it so the general Dollar strength should spread its impact across the entire range of currency pairs once again.

However, I feel after this next drop the move should slow down considerably. I imagine the final low could well occur by Wednesday or if the correction is very slow, then by Thursday. I’ll reiterate my belief that this will provide the final Dollar high before the underlying weekly downtrend should resume. I would not be too surprised if this next daily decline is quite sharp. I’ll hold off from a definite call on that but we’ll have to see how it begins.

Again, as mentioned yesterday the Dollar strength had its impact on the U.S. Indices which themselves are in a correction before another rally to new highs. Thus the two appear to be quite well correlated for the moment. The Indices are due another drop tonight followed by a pullback ahead of losses to the final corrective target.

Even USDJPY looks as if it has legs to move higher too though I feel this may top out a little earlier. It’s difficult to tell as recently this has labored in both directions. However, once this does top out it is in the same position as the Europeans in looking for sustained losses.

USDCAD is also in its last leg higher while AUDUSD is still expected to extend losses…

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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