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HARMONIC ELLIOTT WAVE

Monday, July 11, 2011

Friday caused some major ambiguities…

Choppy indeed… but that’s hardly an inspired outlook on Friday given the fact it was the dreaded NFP day… Having looked through the currencies about half seem Dollar bullish and the other half Dollar bearish. What does that tell us? Time to flip a coin maybe? Time for the earth to shift its axis?

The sharp drop at the tail of the day in USDJPY does not look promising and that also appears to have nudged EURJPY over the precipice. Having said that I’m not entirely convinced that we’ll see that drop directly … assuming it happens. The cross dipped to the top end of the next support which points more to a pullback before any further substantial losses. If EURUSD is to go down then it too needs to dip and pullback higher before the larger collapse. As I pointed out last week, EURUSD does seem poised to confirm a larger directional move and I think that will become clearer by the end of this week.

GBPUSD corrected higher and far more than anticipated. I think it would be a bit of a knee jerk reaction to get too bullish at this point. In some ways I’d like that but the structure is rather ambiguous… I’d rather wait and watch on this as frankly there hasn’t been any clear breaks of range yet.

Swissie? Hmmm… Have been wanting to see this lower but there are clear daily & weekly bullish divergences. However, weekly momentum is at a crucial point and any stronger price losses would imply downward acceleration. AUDUSD still seems to have one more high but would then, at the same time, confirm a more positive outlook but not before a pullback lower… USDCAD – as long as it doesn’t take off too much should actually extend losses…

So, in summary, there are a few conflicts around but also the need for some initial corrective moves. I’d therefore prefer to treat each currency pair separately and wait for the larger structure to make itself known… Continue to exercise care…

Have a profitable week
Ian Copsey

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