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HARMONIC ELLIOTT WAVE

Monday, August 15, 2011

More monkey business?

Friday proved to be a pretty dull day, the market clearly not up to challenging either direction and settling into mostly dull range trading or limited moves. Even USDCHF, after having pushed up so strongly on Thursday failed to generate any substantial strength but did extend gains later in the day … and has been a bit more aggressive this morning on open. Momentum is still firm here and could well imply a deeper move to the next retracement resistance. I remain with what I feel should be stronger Dollar losses once the Swissie has made its high.

EURUSD and GBPUSD both seem to be making headway but it’s pretty dull. The moves do seem more positive but the general lethargy in their rallies is rather frustrating. We still need a pullback anyway – it’s picking the right area for the top that’s proving tough… and points to a slow start to the expected Dollar weakness. Of course that risks us getting lured into complacency so that when the breaks happen we could get caught off our guard.

The same appears to be true for USDJPY. I had raised the alarm for stronger losses. They will come but Friday’s moves and today’s opening have taken the shine off the downside. It was getting tough anyway as the short term just wasn’t shaping up well enough to generate the sort of bearish projections that would have been enough for them to hit levels that fit into the larger picture. That does seem to indicate a possible move above 77.24 before we can see the downside begin to develop…

So I have to provide the same general advice of taking it easy. It’s the summer doldrums, Japan has Obon holidays this week while Asia and N.A. are still in the grips of their own fears so unless those fears are stoked the market may be quite dull.

Have a profitable week
Ian Copsey

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