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HARMONIC ELLIOTT WAVE

Monday, September 12, 2011

That correction is closer… but may need a minor new high first…


The Dollar has certainly made its presence felt. I don’t think we have reached the extreme as yet but I do feel we are approaching an intermediate high that should trigger a correction – and probably over the first half of today. I suspect too, that the correction could last a while. Maybe it can last until mid-week but there will still be further highs to come. Right now there is just no sign from momentum even suggesting we’ve seen a major turning point.

So watch out for the next few days as this is going to revert to messy corrective structures for that correction which means greater potential for stops getting hit and further frustration.

Even USDJPY “screwed up” in its own way on Friday, looking as if it had broken higher but then recycling lower. While a bit frustrated with the more complex correction it doesn’t really change my view but we do still have a little further higher to go so this should keep EURJPY from excessive losses right now but I still retain a longer term bearish outlook that will also see USDJPY begin to make its own impact on the decline. Probably we’ll see the high some time this week depending on how slowly/quickly it can follow-through with the current rally. For the cross – well I wouldn’t be surprised to see 100 tested again around the turn of the month maybe…

Just a note on USDCAD which has been pushing higher itself. This still has a little further to go but I can’t see this developing an aggressive rally but does seem to require a pullback also. AUDUSD has some losses to come also. Quite what it does once we reach that low will be crucial and could be an indictor for the longer term.

On the issue of whether the 16.5 year Dollar bearish cycle has ended I remain open at this point. I’d rather look to see how the Dollar reacts when it reaches those anticipated highs and how the reversal develops. It’s not impossible but just a trice too early to be totally certain.

Have a profitable week
Ian Copsey

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