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HARMONIC ELLIOTT WAVE

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 

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