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HARMONIC ELLIOTT WAVE

Thursday, May 26, 2011

Stubborn maybe, but I still feel the Dollar needs to rally…

My goodness the market knows how to make hard work of things… and that certainly makes my life even harder as I much prefer straightforward wave development. However, that is something we don’t have right now. Euro down, Cable up, Swissie down and the good old Yen watched in confusion holding a tight range…

So what next? Well, the rally in GBPUSD and the decline in USDCHF maybe rather a concern but I still feel there is a last leg higher for the Dollar. Whether this causes a deep correction in GBPUSD or new lows is something I’ll handle as it happens but I’m still quite reluctant to see the Dollar resume the larger downtrend just yet.

The U.S. Indices remained in a basic sideways move but still looks more corrective than a reversal higher and that also beckons new lows for U.S. equities but these are now due directly. That should mean that the Dollar must gain directly also.

From what I’ve seen of EURUSD that is most definitely indicated while yesterday’s highs remain intact. The problem I see in the shorter term is that GBPUSD probably needs to poke its head above 1.63 again – but I don’t see it getting too far. If these two European buddies see correlated moves today then that should mean that the Dollar should start rallying once the GBPUSD high has been reached.

USDCHF is also on the brink and must remain above yesterday’s low else the picture there will turn more directly bearish. This is also a bit of a concern. USDJPY needs to break yesterday’s range but upside does appear limited at this point.

EURJPY appears range bound.

Today’s free analysis is for USDJPY 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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