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HARMONIC ELLIOTT WAVE

Wednesday, November 16, 2011

Resistance creaking… but not quite broken…


Somehow, while GBPUSD broke support and USDCHF extended higher the Dollar Index somehow managed not to penetrate last week’s high. Technically it can still be counted as being in a bearish structure. Can it continue? Well, possibly but it will take some losses to get this back on track. Currently there are even some indications of Dollar bearish divergences in the hourly charts. That’s fine but they’ll need price to actually confirm those divergences – so again, any potential for the overall downtrend to remain intact is going to require some constructive losses soon else key resistances are going to crack…

Whichever way this goes I see quite a solid move through to the end of the year, and if history often repeats itself, then into the early part of January. Up? Down? I don’t really mind. However, I do see next year as a very positive one for the Dollar but that’s another story for another day… or 5 years.

Today… well, it looks like we shall get a pullback first. This, I suspect, will be the litmus test for what is to come – a correction or a total reversal – although the latter will obviously require someone in Europe to say or do something positive which does seem a very remote possibility to be honest.

Thus, take note of the areas that will generate the required break… and be aware that once the break occurs the subsequent move, in the medium term, should be pretty much one way…

Good luck
Ian Copsey

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