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HARMONIC ELLIOTT WAVE

Monday, August 29, 2011

The beginning of a stronger move?

I think there’s a good chance that the craziness we’ve had to endure over the past two weeks is over. Well, I certainly hope so… Even then, right to what I think was the very end it stretched the imagination and even the Dollar bearish outcome that I have maintained throughout.

This morning’s task has been to try and identify the correct foundation waves that will identify the correct projections but given the way the horse bolted from the gates it’s not entirely clear. I feel it may well be down to whether we see prompt follow-through or a pullback before the next leg in the downtrend.

Before I go further, let me just say that this does have the appearance of being the final stage of the multi year Dollar bearish cycle. In particular, both EURUSD and GBPUSD are quite clear in this with both expected to push above the 1.5143 and 1.7042 highs. I’d like USDCHF to make one last low also. USDJPY should also extend losses although I have much stronger bearish targets at this stage. For those targets we are going to need some fairly shocking losses. If they don’t come I may well have to be satisfied with a less aggressive final low.

As a guesstimate I’d imagine this should be over within around 2 months.

A word of warning on EURJPY also… That failed to extend gains as I had been looking for and could well be the sign of a reversal lower… Take care here. This also tends to suggest the risk of stronger losses in USDJPY…

For today, while there is still some uncertainty over the base structure of the decline (direct follow through versus a correction) we’ll have to be somewhat cautious. However, be aware that the risk should now be more strongly lower for the Dollar…

Have a profitable week
Ian Copsey

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