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HARMONIC ELLIOTT WAVE

Thursday, October 6, 2011

The correction could deepen slightly before Dollar gains


The warning about the risk of consolidation was appropriate yesterday. It was pretty boring actually… However, the way I see this correction developing doesn’t look like one that will last too much longer so by the end of today – at most tomorrow – we should see the Dollar moving higher again. This tends to be echoed by the U.S. indices also that crept higher into the close but are displaying some firm 5-minute bearish divergences. Now it’s a matter of breaking key supports there…

What I do feel is probable is a new Dollar low in this particular correction that seems to be required across several currency pairs but then see the gains develop. One other more possibility is a recycling back to the 1.3260 low in EURUSD but then followed by the move to minor new Dollar lows before reversing.

Therefore, it’s another day to exercise care and don’t get too wedded to a position. This type of market should carry a government “wealth warning…”

USDJPY is as sludgy as ever, not quite managing to convince itself of which way to walk and staggering around much like a drunken salary man in Shimbashi… or come to that, in London, New York, Singapore or Hong Kong… The direction of EURJPY does still seem dependent on EURUSD and the cross itself also seems to need a new high before it can resume losses. During that time it’s possible that the moves in USDJPY can remain in stagger mode…

So… it looks like another day to seek other sources to get your kicks today…

Good luck
Ian Copsey

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