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HARMONIC ELLIOTT WAVE

Tuesday, July 26, 2011

Just a little bit more…

If last week ended on a rather dull note then yesterday took a turn for the worst… Dull, boring whippy… well, perhaps with the exception of USDCHF… The bad news is that I can’t see that the slow, dull correction has finished. The good news is that I think it will today.

And then the Dollar should lose out a bit more. I can’t see any change in this basic direction for now although I can’t see it being a smooth ride. Part of the core development I see through EURJPY. That edged lower again yesterday, itself without any great power but there does seem one more leg lower to come and should be fueled by a minor decline in both USDJPY and EURUSD. Neither seem to have much breathing space on the downside but with both then likely to recover – the Euro more strongly than USDJPY – the cross also seems to have potential for one more, messy rally. The fireworks should then begin to sparkle…

The drop in USDCHF has thrown my prior thoughts into doubt. If they can remain somewhat the same then we’ll need a prompt and firm recovery. Momentum is mixed so it’s hard to get a grasp of exactly what it wants to do. From a weekly perspective the trend is quite obviously lower and it’s the persistent shallow pullbacks that are shrouding the structure. A deeper pullback is required at some point – but it’s not clear whether that “point” has arrived…

Other than that, I am changing my mind on AUDUSD although I still feel it’s due a further correction. This does keep it more on a bullish structure overall. USDCAD has formed a structure that can be the foundation of several alternatives… It could be a complex correction or it could generate a second push higher. The longer term remains bearish though…

Good luck
Ian Copsey

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