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HARMONIC ELLIOTT WAVE

Wednesday, June 1, 2011

I still think there is room for Dollar losses but more care is now required

Losses weren’t as robust as I had expected and in USDCHF and GBPUSD we actually saw a deeper pullback. I’m quite comfortable with USDCHF as it remains within the retracement limits set yesterday and unless this breaks the outlook remains bearish. GBPUSD… well that could be a different story… I can see a reason for this to have found its high and one piece of evidence is the bearish key day reversal.

Overall, even with GBPUSD I see the Dollar losing out today, the difference being that new extremes should be found in EURUSD and USDCHF but I’m more cautious about GBPUSD which could just see a pullback only. That one is more one to watch and react to developments now. Overall the Dollar lows in the other two should spurn deeper corrections at the very least…

USDJPY went and spoiled the party by whizzing higher early in the day. The depth of the rally is a slight concern and will need watching. However, at this point I feel it fits into one of those “deeper than normal” corrections and as long as it makes the right moves early on I would not be surprised to see new lows. If this develops then it, too, should imply a correction once the low is in place – but only a correction before losses.

Of course this led EURJPY higher and complicates the structure there. I’d still prefer to take a more passive stance here as it appears to be at risk of going on one of its meandering walkabouts, backtracking and reversing almost at whim in a complicated corrective pattern. I can only see it making significant gains if USDJPY decides to up stakes and make another stronger rally. I’m not prepared to go that route unless it proves itself…

There does seem to still be upside potential in AUDUSD and downside in USDCAD…

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

Good luck
Ian Copsey

UPCOMING HARMONIC ELLIOTT WAVE WORKSHOPS IN HONG KONG AND SINGAPORE

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