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HARMONIC ELLIOTT WAVE

Thursday, October 27, 2011

We really need Dollar losses to extend now… else suffer a deeper correction


The general messy & chaotic range trading continued yesterday although extended its boundaries with some Dollar gains into the end of European trading. From that point onwards it renewed a more bearish Dollar losses over the North American afternoon. It wasn’t quite how I had envisioned things but in retrospect it does seem to have merely seen a larger recycling that points to the Dollar downside again.

Well, that’s the plan. I’ll feel a lot more comfortable when yesterday’s lows are taken out and assuming this occurs then I’d fancy quite a solid follow-through lower with a mild step up in acceleration. In addition, moves above the 1.4060-1.4100 area would also make a stronger statement of intent. The same is true of GBPUSD that now needs to break above the 1.6082 corrective high to provide a more significant break of the last corrective high on the way down. Once these breaks are seen the Dollar downside becomes a firmer structure. Until that point there still remains the risk of a deeper pullback in this overall Dollar bearish move…

USDJPY also played us around a bit and this now looks like it will recycle back to the 76.60-70 area which is a key retracement and pivot resistance area. Equally, this needs to hold to retain a direct – and probably stronger losses into the end of the year when the 16.5 year cycle should find a major low point.

EURJPY – still messing around and now needs a little more care having seen a reversal higher from a minor new low… This could resurrect another limited rally unless USDJPY sees a more direct fall from favor…

Good luck
Ian Copsey

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