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HARMONIC ELLIOTT WAVE

Thursday, August 4, 2011

I still see a lack of correlation across the currency pairs…

I had the feeling that yesterday could be messy. I’m not sure it’s going to be much different today… My preferences run:
Dollar bullish: USDCHF, GBPUSD, AUDUSD;
Dollar bearish: USDCAD, EURUSD… except that could be both but Dollar bullish first…

Can we rely in USDJPY? Well, the only thing you can rely upon here is that it will either remain in a semi-comatose state or it will go ballistic – that could be in either direction as the market tries not to upset the MOF / BOJ but then can’t hold off from Dollar selling…

The pointer for USDJPY may come from the cross. Obviously this has rallied strongly along with USDJPY this morning and has a little further to go, as does USDJPY. This should take a few more days and in the meantime the risk is for a correction lower in both before the final push higher… Overall I remain bearish for both USDJPY and the cross in the longer term.

EURUSD… Hmmm… Yesterday’s rally looks bullish. If I’m honest, I’m bullish GBPUSD as well. However, here the issue is more whether the decline we saw to 1.6224 was a correction or we have one more dip to go… My thoughts are more on the GBP bearish side before it can extend its gains more robustly… but I wouldn’t fight against a direct rally…

But it does seem to conflict with USDCHF… Having said that, my calls in USDCHF haven’t been the best for the past week or two. I am longer term bearish so all I’m battling with is whether a correction higher comes first or we see direct losses…

So in summary, there is some ambiguity in the short term but don’t fight any solid resumption of Dollar losses…

Good luck
Ian Copsey

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