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HARMONIC ELLIOTT WAVE

Tuesday, August 23, 2011

Probably more of the same but perhaps with the Dollar on the soft side today

Yesterday was not a surprise. I wouldn’t have minded a surprise but the market is just not ready to commit to any significant break and I can’t see too much risk that we’ll see any today either. Quite a few currency pairs have the potential to just remain in the confines of the recent range and in this lackluster, summer doldrums market the general favored pastime appears to be watching paint dry…

If there’s any one pair I have hope for it’s GBPUSD but I don’t think it will quite manage it today. Even if it does it should reverse straight back to where we are now.

This type of tight range trading could last into tomorrow as well though I still maintain that we are still in the process of developing a stronger foundation for Dollar losses and I have a hope that by Thursday and Friday we’ll begin to see the outer edges of the range being pushed with greater enthusiasm. I hope so as it’s pretty tough trying to second guess all these corrective structures…

Finally, just as a possible stronger indication of a stronger move we should perhaps watch EURJPY. That moved higher yesterday but even then appears to have gone into a sideways trading range. I prefer higher but I’m not particularly keen on USDJPY strength – or at least not much more than we saw yesterday – and therefore it will imply that EURUSD has to take up the rein. However, even the cross looks likely to be subdued in a range today as well. Eventually though, a break has to be seen and perhaps the cross will point the way.

Try and enjoy the calm while you can…

Good luck
Ian Copsey

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