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HARMONIC ELLIOTT WAVE

Friday, July 1, 2011

I’m still looking for Dollar gains but the structures around are pretty choppy…


Please note that since Monday is Independence Day holiday in the States the next report will be on Tuesday

There were some key breaks yesterday which were much in line with the Dollar preference but the start has been exceptionally choppy with the exception of EURUSD which placidly maintained an exceptionally complicated follow-through higher without actually reaching target. I still think it will and with the same result – the Dollar should win through.

It was elsewhere that the market went bezerk. In my form of Elliott Wave there can be this frustrating deep wave B in the middle of Wave 3. Just about everywhere I looked this morning they appear to have been making spikes everywhere, not just modestly deep Wave B’s but ones measuring around 85%-90%... and this in a position that should provide the trend…

USDJPY was a classic… I felt that surely the spike down to 80.26 was just TOO much… but if I tried an alternative count then I had to accept the same kind of spike the other way around… so for the moment I’ll work with the upside but I sure don’t like the way it has developed.

Then USDCHF appears to have broken the bearish structure but that spike higher is sure confusing with its lack of corrections which is normally a sign of a corrective move rather than trending. Yep, sounds strange, but true 90% of the time… If this is one of the 10% then we’ll need a deep Wave B to make this work right…

Then the high in GBPUSD was, I think, a deep Wave B. No problem as I anticipated it but the spike lower does make the rest of the implied bearish structure look a bit stretched…

In all this AUDUSD just kept on ploughing higher with very little in the way of corrections. I do expect a pullback but it’s almost as if it just wants to keep moving higher.

If all that sounds confusing… well, it is! Overall I prefer holding a bullish Dollar preference but I do feel that we’ll have to be pretty observant in case I’ve got that wrong… The day before a long weekend… sharp spikes… Hmmm, does give the impression we may be in for a static, boring day…

Have a great long weekend
Ian Copsey

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