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HARMONIC ELLIOTT WAVE

Thursday, August 18, 2011

The Dollar continues to lose ground… further to go today…

I’ve been getting the direction right but the pullbacks have been deeper all the way which has been frustrating… I’ve had to look at the structure from the lows once again as these deeper corrections are indicating a different structure. In doing so I am mindful of the eventual targets and therefore need to ensure that the current moves are neither too short to reach target, nor overextend too far that would imply break of those targets.

The end result of my changes are a little difficult to envisage as correct but do seem to hold good ratios for the most part. This should mean a pullback into the European day and then extensions of the moves in EURUSD and GBPUSD. We should note that as we approach the 1.4696 corrective high in EURUSD and towards the 1.6745 high in GBPUSD we are almost certainly going to find some natural barriers and the probability of a longer lasting correction.

In USDCHF this is just about the reverse in terms of Dollar direction. It has slowed considerably but does seem to need further gains before we can feel safer on the downside. It’s still a very tricky structure and I am more concentrating on the larger retracement resistance levels and having to “feel” my way through the developments.

USDJPY… as warned yesterday did lose out and has further to go. I don’t see this as the major drop but more the foundation for a stronger decline that should slot in place with the Europeans. Thus, I’m not going to get too bearish at this stage and doubt we’ll get much below 76.00… This should keep the cross on the defensive for a while although I still prefer a recycling to 114.17 overall.

AUDUSD is due a correction before another rally too and is probably very similar to EURUSD and GBPUSD… USDCAD is still playing cat & mouse but I remain cautiously bullish for now.

Good luck
Ian Copsey

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