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HARMONIC ELLIOTT WAVE

Friday, July 22, 2011

Yesterday came as a surprise… but also brought things back on track…

Ah! In some ways yesterday was in line with expectations… at least the original expectations which I had begun to doubt yesterday morning… Although the rather messed up and choppy intervening moves from Wednesday (which I still find rather strange) screwed up the analysis yesterday the overall result was quite satisfying in terms of the Dollar reaching towards the targets I had identified earlier in the week.

So I’ll just have to scratch my head, swallow my pride and be satisfied with what has happened. It keeps the basic Dollar move for now as bearish although we are on the doorstep of a deeper correction once again. Overall it does seem to confirm my outlook for Dollar losses but with some adjustments over a few of the pairs.

Following that rather awkward flat correction following the 79.60 high in USDJPY it has finally reached the intervening 78.20 target and is due a brief pullback before dipping below 78… After a further pullback it should reach closer to the 76.31 low before a longer correction higher.

This should coincide with EURUSD scrambling back above 1.4696 before collapsing in a European debt heap again while GBPUSD seems to have a little more to go before it, too has a stronger correction. While all this is going on it should provide an opportunity for USDCHF to push higher as well.

My concern is AUDUSD which I felt should be finding a high now. There is a small cushion above which could still keep this under the threat of reversing lower but this is one to watch and take care. USDCAD seems to have opened up a hole and is threatening to go skinny dipping…

And all this leaves EURUSD plodding along on its own, smiling and enjoying the view but slowly mapping out a corrective path higher… It’s close to a stalling point now and should correct lower. It could even drop more strongly as that is the longer term threat so keep this in the back of your mind and observe USDJPY and EURUSD at the same time…

Have a great weekend
Ian Copsey

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