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HARMONIC ELLIOTT WAVE

Tuesday, February 21, 2012

I can only see the Dollar weakening further…



The pullback I looked for on Friday just didn’t materialize and even over yesterday the market continued to sell Dollars. It’s interesting to note the hourly Dollar bullish divergences in the Europeans and they should be noted. However, I can’t help but feel that the structure just doesn’t quite fit into a scenario calling for a correction. More, I see the downside continuing though it does seem to need that follow-through quite directly else I’d have to question the current structure I’m following.

Looking at the Pound in particular the structure does imply a potential detachment from the Euro and Swissie. I do expect the Pound to rally overall but there appears to be a clearly defined initial projection that would imply a subsequent pullback. However, the Euro and Swissie seem to be pointing to more persistent losses. If there is any concern I have it’s this potential detachment between the three. Thus, keep that in mind in case the development I suggest does not materialize.

Dollar-Yen… It’s progressing well but a little more directly than I had expected. The deeper pullback I had been expecting does look like being under progress and could slow the upside progress in the cross against the Euro. There does seem more immediate upside potential but not by too far as a pullback is expected from not too far higher than yesterday’s high. It could be through the cross that we may be able to judge the relative performance between the Euro and Yen, possibly even provide some clues about the anticipated pullback (from higher levels) in the Pound.

Overall, I feel the emphasis is still Dollar bearish against the Europeans but there are signs that these may initially be limited due to the Pound and EURJPY so be aware of levels that would clarify how these will progress in the larger picture.

Have a profitable week
Ian Copsey

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