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HARMONIC ELLIOTT WAVE

Tuesday, August 16, 2011

The foundations are being laid…

Some good bits and bad bits yesterday. The Dollar weakness in EURUSD and GBPUSD has been slightly stronger than expected and that demands some adjustments to the short-term structure but the additional gains still slot into the larger picture. It’s still not quite ready to begin the stronger thrust but I don’t think it’s too far away now. Maybe we’ll see this begin this week but if not, then next week should see some moves that will surprise and shake the market from its slumber.

Now, what did go wrong was USDCHF… I had been looking for a corrective high and reversal lower but it took the contrary view and just extended gains. I can’t see that it has finished yet either. I can still fit this into a bearish structure but even that would still allow slightly deeper gains first. I’m not quite ready for this to maintain a bullish trend while EURUSD and GBPUSD head in the opposite direction… However, for now the USDCHF upside doesn’t look to have completed.

EURJPY benefited from the Euro strength while USDJPY languished in one of its stifling trading ranges. Given that I think the cross can extend gains over the coming sessions USDJPY has two possibilities:- that it corrects higher a little more deeply (though not too far) or it remains fairly static but within that sees a minor extension lower and correction. I feel the cross is going to provide some guidance to us as these developments progress.

Thus, overall I see a similar pattern of moves today in the Europeans, gains to be made but probably with less intensity but moving to a point over the next day or two that should generate a correction lower.

Good luck
Ian Copsey

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