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HARMONIC ELLIOTT WAVE

Tuesday, June 7, 2011

The market has calmed down after Friday but will the Dollar extend losses?

Well it should against the Yen… That downtrend, as slow and jagged as it may be, remains intact and does seem to point lower still. We could even find this breaking below the 79.56 low so be prepared for a possible test. Given that EURJPY has been making hard work of the upside it wouldn’t take too much to knock it off its perch. However, that remains in a firm, if unpleasant, consolidation the structure of which really hasn’t yet made itself known. Until it does it’s probably best not to place too much risk on this pair.

So what about the Europeans? GBPUSD stalled early and EURUSD didn’t exactly set the market alight. I still find the latter has a very mixed structure and I am a little concerned over whether this is developing as I had wanted. We are at a stage in the larger picture which looks critical. It still needs to build a base for a larger and more substantial rally but there are some signs of the current move potentially generating a corrective pattern rather than a trending one. The conflict is significant. A corrective structure would imply new lows, a trending structure would imply the opposite – a correction but then strong, strong gains. We need to wait and watch with care.

However, in both EURUSD and USDCHF I cannot see any strong reversal signals that will completely reverse the weekly Dollar downtrend…

I actually still favor gains in both EURUSD and USDCHF, though the break level in the former is quite close. For GBPUSD I remain open as it really hasn’t aggressively extended the losses seen last week. This tends to bode well*overall but there’s still some potential short term weakness while the market remains subdued.

I still have a mild preference for AUDUSD gains and also USDCAD which tends to sum up the market right now as there seems limited correlation across the Dollar-currency pairs. Thus it is probably best to take things carefully until this sorts itself out.

Today’s free analysis is for USDCHF 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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