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HARMONIC ELLIOTT WAVE

Friday, March 30, 2012

That was the week that will be…


  PLEASE NOTE THAT TOday'S  UPDATE WILL BE THE LAST ENTRY. FROM APRIL 9th PLEASE SEE  http://harmonicelliottwave.blogspot.com/ IN LINE WITH THE HARMONIC ELLIOTT WAVE BRANDING. PLEASE FEEL FREE TO CONNECT DIRECTLY WITH THE NEW BLOG ON WHICH I SHALL POST ADDITIONAL INFORMATION. 



Given I shall be taking a break over the coming week today’s report will provide both today’s outlook and an overview of the overall expectations for the next seven days.

The depth of the pullback in EURUSD has been a little concerning and I wouldn’t really want to see much more Dollar strength overall otherwise the balance of what I see as the underlying Dollar downtrend. Having said that, USDCHF saw a break above my pullback limit of only 2 points and GBPUSD remained quite buoyant. It does seem that we do really require losses to extend more directly now to maintain the bearish directional bias we have been seeing. Should this not occur the potential may well be for a longer sideways consolidation but clearly with the Dollar seeing further strength above what we have seen these past two days. Indeed, I feel that this Dollar weakness should continue to new lows today else begin to lose the luster and shine that it had displayed last week. Clearer signals will be implied once the 1.3585 high EUR, 0.9016 low USDCHF and 1.6000 high GBPUSD are broken. Failure will require more care and, as I mentioned, higher risk of a pullback higher / consolidation.

USDJPY dipped to new lows in this correction and thus places pressure on the EURJPY cross. Firstly, while I am quite comfortable with the downside in USDJPY and see current levels as a possible mid-point within the correction lower, we also need to restrain too much of a bearish outlook based on the cross which has effectively ruled out a recycling back to 107.51 but appears to now be locked within a sideways trading range, potentially a triangle, before the basic uptrend can resume with more vigor. I suspect the upside in EURUSD will battle with the downside in USDJPY and for what may be the coming week. Once that is complete the implication is bullish for a break above the daily 111.59 high. Therefore watch this 3-way battle as I feel it will provide an outline for the script the currencies following.

As an additional backdrop I still see the U.S. equities as having more room for gains over the coming weeks. The next move should be higher but there are closer projection areas that will provoke further pullbacks and thus the rather rampant performance we have see over the past month is likely to give way to a more 2-way market. This does seem to broadly correlate with the Dollar’s performance also.

Good luck and good trading for the coming week…

Ian Copsey 

Thursday, March 29, 2012

A slight detour in plans


  PLEASE NOTE THAT TOMORROW'S  UPDATE WILL BE THE LAST ENTRY. FROM APRIL 9th PLEASE SEE  http://harmonicelliottwave.blogspot.com/ IN LINE WITH THE HARMONIC ELLIOTT WAVE BRANDING. PLEASE FEEL FREE TO CONNECT DIRECTLY WITH THE NEW BLOG ON WHICH I SHALL POST ADDITIONAL INFORMATION. 



I was a way from my desk for much of the afternoon and returned just after U.S. open, saw the Euro and Swissie had stalled precisely at my Dollar resistance levels and smiled, turned off my PC and went to the land of nod. Getting up this morning I saw those levels broken. Ouch…

First things first, there’s no change to the Dollar bearish view. The deeper pullback implies one of two things: either the downtrend will be weaker than expected or; confirms a stronger follow-through and given the earlier structure I favor the latter. It doesn’t alter the eventual targets but merely diverts the intervening structures into an alternative route. This is also supported by the deeper pullback in GBPUSD, something which I had warned would be probable before long. It just developed earlier than expected.

I had warned in yesterday’s U.S. Indices report that a deep pullback was probable and that’s what we saw. The implication is still upside in the Indices so the basic correlation holding intact. Next will be correlating the peaks of the Indices with the push lower in the Dollar. I’m pretty certain where the Indices will stall with several common targets ready to be tested.

USDJPY and the cross… Hmmm, the deeper pullback in EURJPY seems to have destroyed the directly bullish outlook. I still think it will rally, and quite certain about that but the implication from what I can see from USDJPY in particular but there does seem to be some risk of recycling. At this point I think the two are more likely to rally again as the cross still seems to require a retest of the 111.43 high but at that point we have to see whether it can push firmly above the daily 111.59 high or recycle lower.

In summary, favor the Dollar resuming losses against the Europeans with just the near-term possibly causing some temporary consolidation. Take care with USDJPY and the cross…

Good trading
Ian Copsey

Wednesday, March 28, 2012

Today should see the Dollar extend losses a bit further


 PLEASE NOTE THAT THE FINAL UPDATE TO THIS BLOG WILL BE ON THE 30TH MARCH. THEREAFTER PLEASE SEE  http://harmonicelliottwave.blogspot.com/ IN LINE WITH THE HARMONIC ELLIOTT WAVE BRANDING. PLEASE FEEL FREE TO CONNECT DIRECTLY WITH THE NEW BLOG ON WHICH I SHALL POST ADDITIONAL INFORMATION. 



With some minor glitches yesterday went close to expectation, the glitch being the marginal new lows while the overall deeper correction then ensued. Indeed, it looks like reaching the target correction areas early in Asia that should cap for the Dollar downside to resume. Having said that, I can’t see the follow-through being excessive at this point and more likely, once the new lows have been seen we can probably expect a deeper correction that should last into Friday at least I would think.

This still leaves the medium term structure as bearish and for the next leg lower to develop next week so best take advantage of the pullback to provide better selling levels – certainly against the Europeans that still have some way to go to their final targets.

USDJPY is a different kettle of fish. It has been a bit difficult trying to judge the structure of the recovery from the 81.97 low and just how far this can get. It is in a particular ambiguous structure that permits a variety of alternatives including a retest of the 84.17 high. It could even edge even higher and recycle. It could just cap below 84.09-17 and make a deeper foray lower. Perhaps the controlling factor is EURJPY. This reached its 111.24 intermediate target yesterday. However, the pullback is expected to be shallow and for the upside to extend. It’ll only be at the higher projection target that we can expect a longer lasting correction. This could well be controlled by EURUSD, may need some help from USDJPY, but I’m getting the impression that we could see a retest of the 84.17 high at some point. The “love triangle” here should be a core indicator to how USDJPY develops…

AUDUSD stalled just a touch short of the 1.0560-80 target range and has corrected lower. This has helped to solidify the structure. Like the Europeans the downside is limited and we should see the Aussie resume its rally quite soon.

In summary, there’s little Dollar upside left this morning in Asia and thus look for another drop in the Dollar.

Good trading
Ian Copsey 

Tuesday, March 27, 2012

A correction seems due at this point but overall the Dollar remains weak


 PLEASE NOTE THAT THE FINAL UPDATE TO THIS BLOG WILL BE ON THE 30TH MARCH. THEREAFTER PLEASE SEE  http://harmonicelliottwave.blogspot.com/ IN LINE WITH THE HARMONIC ELLIOTT WAVE BRANDING. PLEASE FEEL FREE TO CONNECT DIRECTLY WITH THE NEW BLOG ON WHICH I SHALL POST ADDITIONAL INFORMATION. 



Yesterday was broadly as planned. The initial mini-recycling was a little deeper than anticipated but overall the reaction in sending the Dollar to new lows in this particular move is smack in line with the way I have been expecting. The structure hasn’t been plain sailing with some fairly direct wave-commencements that have made identification of the initial foundations quite tough. However, the losses continue to encourage and this should be seen as the underlying direction for the coming two weeks I would estimate, perhaps a little more.

As we start the Asian session it does look as if we shall see a modest pullback. At this point I think it unlikely to be a short & sharp correction, even if that’s not the normal manner of trading in Asia, but more a factor of the direct wave commencement with a very brief correction that tends to point to a longer, deeper and normally more complex pullback. Thus, make sure that we see this type of move and be aware of the expected retracement limits.

One currency I am still puzzling over is USDJPY. Yes, I do still think it’s in a bigger correction lower. However, the EURJPY cross has still some way to go on the upside and this tends to argue against seeing much weakness in USDJPY. I do think EURJPY should see a pullback but the depth is not 100% clear. I suspect it will be deep but this is not in the same area of the structure as EURUSD or USDJPY and therefore we’re going to have to watch this carefully. Overall this cross is bullish so I still favor looking for finding better buying areas.

In summary, the first half of the day could well be taken up with navigating the deeper Dollar corrections but by the second half the general Dollar weakness should begin to develop once again.

Good trading
Ian Copsey 

Monday, March 26, 2012

I think I’ll stick to saying the Dollar won’t go down… (but it should…)

 PLEASE NOTE THAT THE FINAL UPDATE TO THIS BLOG WILL BE ON THE 30TH MARCH. THEREAFTER PLEASE SEE  http://harmonicelliottwave.blogspot.com/ IN LINE WITH THE HARMONIC ELLIOTT WAVE BRANDING. PLEASE FEEL FREE TO CONNECT DIRECTLY WITH THE NEW BLOG ON WHICH I SHALL POST ADDITIONAL INFORMATION.




It worked! I’ve learned a new trick… If I don’t say what I think will happen then it happens… The Dollar lost out on Friday and pushed to minor new lows for the week. Will that extend further today? Perhaps I shouldn’t tell you otherwise it may not happen… Joking aside, mainly from what I see in EURJPY I think that either both EURUSD and USDJPY need to rally… or they both need to fall. Which side has the greater capacity for movement? The upside…

If I merely eyeball the chart I could make out an argument for the Europeans to recycle back to last week’s Dollar highs but I’m not convinced that the initial pullback developed in the right manner to suggest that’s possible. Anyway, even if it did then USDJPY would have to find a low around 80.00-20 at the same time as the Euro reached 1.3115-25 for EURJPY to reach the 105.64 low. That seems a bit like remaining in the eye of a hurricane as it travels. It does look more likely that the cross is going to stage a rally and that’s going to require support from both constituent members…

Having said that, this does look more like a pullback higher in USDJPY as Friday’s whip down to 81.97 must now imply an eventual deeper correction lower. It’s going to complicate things but possibly this may just develop as a sideways consolidation while the cross can make further gains.

The Aussie did enough to stake a stronger claim to have found it’s corrective low too. Therefore the indications all round appear to be in sync. Therefore, it does seem to me that the Dollar should extend losses today… but shshshsh, don’t tell anyone otherwise it may not happen…

Have a profitable week
Ian Copsey