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HARMONIC ELLIOTT WAVE

Tuesday, June 28, 2011

Twists, turns, alleyways and dead ends…

It is obviously very apparent that the market has no real desire to push the Dollar anywhere particularly quickly or with any strong intent other than not making a decision. That’s a sentence that describes corrective markets…

Yesterday’s recovery in EURUSD and indeed, GBPUSD came as a bit of a surprise and certainly takes the sparkle off the Dollar bullish side. At the same time it opens up a greater variety of potential corrective patterns which will make life much tougher when trying to work out the structures in each currency pair while at the same time holding loose correlation. Overall, if what I feel is happening develops it could extend this period of confusion for another 2 weeks or so. Therefore it’s a period to retain an open mind and be prepared to alter views and direction as price develops.

Certainly for today there looks to be further room for Dollar losses against the European although I feel within recognizable boundaries. Once the sort of targets I have in mind are attained there should be a fairly solid pullback which should begin by tomorrow at the latest. This pullback should allow GBPUSD to make new lows.

The bigger story appears to be USDJPY which ploughed a firm bullish tone throughout yesterday and does still seem destined for higher levels. I’m rather mixed on how high this will eventually move but I wouldn’t be particularly surprised to see it as high as 83.50-00…

This also has impact on EURJPY which naturally tagged along with one hand on the USDJPY shirt tail and the other on the EURUSD. The implication does appear bullish for now but I suspect a choppy ride overall over the coming week or two.

However, the bottom line is… we are still within some complex developments which will almost certainly spring further surprises over the coming days. Thus, remain flexible and take profits early.

Good luck
Ian Copsey

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