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HARMONIC ELLIOTT WAVE

Tuesday, January 24, 2012

Conundrum (mostly) resolved…


Ouch, yesterday was painful again. To be honest, yesterday’s Dollar lows could still be counted as just a deeper correction in EURUSD. However, the additional follow-through in USDHCF and GBPUSD merely emphasized the task required to get EURUSD (independently) lower to the 1.2443-55 target. That GBPUSD and USDCHF extended their moves is more of an annoyance factor as they are still within the normal projection ranges for this particular area of the structure. That being said, the potential for EURUSD to reach the triangle target while the other two merely correct is just not something that can be justified.

So, it required another review and I can see that we had a string of short Wave C projections in several places which were much shorter than I would normally look for. Taking this into account the projection and retracement ratios were pretty good.

Thus, the Dollar is in a move lower across the Europeans… But… as there always is… I don’t see it extending today – or not by much – literally 10-20 points at most though I doubt we’ll see that. Part of the reasoning for the call for a correction yesterday was down to the U.S. Indices that I felt were close to a high and in need of a pullback. Well, those minor new high targets were met yesterday and these imply a period of sideways consolidation.

Equally, the same should be true of the Dollar. So expect a correction today…

USDJPY – still hanging between two scenarios – but of more importance is the EURJPY cross. Now that I can’t justify stronger losses in EURUSD I have to voice doubts over the cross also. The only possible outcome must be a very weak USDJPY. Well, that needs to be proven first – and of an extent that would drive the cross lower. I’m certainly not going to stick my head out for that one…

Good trading
Ian Copsey

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