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HARMONIC ELLIOTT WAVE

Friday, July 8, 2011

There seems to be an element of make or break for the Euro

Yesterday’s outcome was hard to actually forecast with any accuracy given the rather disjointed positions between the currency pairs but what occurred was mostly in line with the general expectation because of those conflicts. Obviously the market concentrates on EURUSD and this extended losses pretty much as expected and stalled just above one of the projections I detailed at 1.4212.

I’ll concentrate on this in particular as it does seem to represent a halfway house between a larger bullish or bearish outcome. At this point, as I explained yesterday, my preference is more towards Dollar weakness but from other developments yesterday this is not a certainty. Even if I see, in particular, more reasons for long term Dollar weakness against the Swissie, Pound and Yen these all seem to possess some short term Dollar positive structures following from yesterday’s moves. They may well be corrective but right now is not a time to be too fixed on one outcome.

For EURUSD itself there is still a slight ambiguity. It has been developing extremely well within ratios appropriate to a triangle. The question is… “is this a bullish continuation with yesterday’s low being the launch pad, or a bearish continuation within a corrective structure lower?”

The answer lies in the coming move. A direct rally would look very bullish. A dip to below 1.42 would extend the triangle for one more leg higher before stronger losses.

Today is U.S. Non-Farm Payrolls… Whoopee! That means a day when anything and everything can happen and what’s more in a nano-second of sheer panic and terror following a full day of watching paint dry… However, once this farcical event is done and dusted, note the next move as it should provide a stronger clue to the next larger break out…

Have a great weekend
Ian Copsey

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