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HARMONIC ELLIOTT WAVE

Tuesday, November 22, 2011

It’s not a time to go headlong into the Dollar…


The Dollar bearishness that marked the tail end of last week met a brick wall yesterday with gains seen across the board and more noticeably against the Pound and Aussie Dollar compared to the Euro and Swiss Franc. Taking off the binoculars and looking at the larger picture it does bring more focus on what still appears to be a rather messy near term outlook for the Dollar and what I feel may well be continued sideways consolidation overall. I’m pretty certain that it has taken away any potential for a larger recycling but I’m not sure it’s going to head in either direction with any heartfelt conviction.

One thing to note is that there does still remain a possibility of marginal new lows in both GBPUSD and AUDUSD. Perhaps there may be some friskiness elsewhere, but I can’t see the Dollar managing new highs against the Euro or Swiss Franc. These two in particular look as if they’re hitting a period of modest Dollar weakness but within range. Within this pair, if I see the Dollar weaker it’ll be against the Swiss Franc. USDCHF seems to have some slightly stronger downside risk but probably not until the second half of the day – which is when I see the Dollar being at its most vulnerable.

Elsewhere USDJPY has a quiet day and does still seem to be within a correction higher. I remain bearish overall but this remains in a very large sideways consolidation and I don’t really see and near-term potential for a break out of the 75.57-79.53 range and probably much together than that. Therefore the EURJPY cross will move in line with EURUSD overall and I can’t see that moving too far lower right now and more likely shifting its trading range a notch lower only.

Being what appears to be a consolidating market best take profits when you can.

Good luck
Ian Copsey

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