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HARMONIC ELLIOTT WAVE

Thursday, December 22, 2011

There seems a good chance we can begin to see Dollar gains again


Yesterday surprised me somewhat. The market seemed to be doing rational things, or at least what I think is rational. Indeed, it reached the retracement areas I had looked for that would complete the correction. I can only now assume that the Dollar will resume its rally.

Assuming this occurs two key areas should be watched away from EURUSD and USDCHF, both of which should see the Dollar extend to new highs. This is where I’d rather see GBPUSD and AUDUSD remain above their recent lows. It wouldn’t be the end of the world if they did, but it can’t be by too much. Having said all that, this is effectively the last trading day before Xmas but even today will be one where traders really, really prefer to sit on their hands and dream of Santa. Thus, it’s quite possible that while we could see some movement the chance of lapsing into consolidation is high.

USDJPY is making full use of the 77.61 – 78.16 range… I can see arguments in both directions. However, retain composure until the final break is made. From the perspective of the cross it looks to me as if it found its retracement resistance – or soon will – and the downside still appears the more vulnerable.

Take care. Only take trades where you see a strong set up… but be aware that in such low liquidity these can fail more often than normal…

Good luck
Ian Copsey

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