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HARMONIC ELLIOTT WAVE

Friday, May 27, 2011

Well… it seems the Dollar correction is complete…

With Monday being Memorial Day holiday in the States the next report will be on Tuesday


Too stubborn. That appears to be it. The Dollar appears to have completed the correction from its lows and from what I can see from what has developed it certainly looks as if it means business in resuming the multi-year downtrend. Given that the correction has been relatively brief (in relation to the moves from 1.2858 EURUSD and 1.4231 GBPUSD in particular) it will be worth holding back from getting too carried away but if already short Dollars I feel running trailing stops would be a good idea. Short term momentum remains quite strong and if I believe what I’m seeing this still has a way to go. In the bigger picture the outlook is quite astonishing – according to what I feel I am seeing – and I never like to get carried away too soon. However, be aware that the implication I see is for the Euro to top 1.6036… First things first, let just take the current move and check to make sure the initial development supports that view…

All majors seem to be pointing to the same picture. We do have to keep in mind that this is a long weekend and therefore the risk is for a holding pattern over Monday’s trading. This should still see further losses over today therefore but there are some stronger stalling points coming up soon and I’ll try and outline the sort of areas that will provide the Dollar support for today.

On EURJPY there are two options, both basically bearish but one where we could see the holding pattern continue for today and maybe Monday and the other a direct follow-through lower. I suspect the latter since this appears to have the greater potential for continued direct losses over Monday. Therefore, take note of levels in the cross as these should highlight the (probable) USDJPY risk.

It also looks as if the U.S. Indices have made a final low and should rally along with the Dollar decline…

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

Have a great long weekend
Ian Copsey

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

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