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HARMONIC ELLIOTT WAVE

Thursday, March 22, 2012

Dollar losses didn’t follow through yesterday… but should today


PLEASE NOTE THAT BY THE END OF THIS MONTH I SHALL BE CLOSING THIS BLOG IN FAVOR OF   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 have to admit I didn’t expect a recycling yesterday. It has, so we have to just get on with it but I remain Dollar bearish overall. Right at this moment the Dollar is sitting at a point where it could choose to complete the recycling or just resume losses. The only calamity I see is a deeper pullback than I had been looking for – and there is a weaker argument for that… Even then I’d remain bearish.

Point made. I’m bearish! When the downside resumes it does seem to promise quite a solid move against the Euro and Swissie, preferably less so against the Pound. It could also see losses versus the Yen but there’s still a question mark over whether that will develop directly or see one more new high before it does so. I mostly prefer a mild dip before one more rally that is down to the relationship with earlier corrections in the larger move higher.

If there is any uncertainty I hold it’s more down to EURJPY. Yesterday saw a daily bearish key reversal. These one-bar signals do not necessarily confirm a collapse but can generate a period of consolidation or mild weakness. I have seen them fail altogether. But there’s more that just that. It did also reach a key expansion level that is seen within one of these irregular corrections and does have the larger structure to support the potential. The implication, if it develops, is a move right back down to 105.74. The key here is that assuming EURUSD remained where it is right now USDJPY would have to reach the 80.58 area to generate sufficient losses in the cross to recycle that low… unless, of course EURUSD also lost ground. It’s something to keep in mind but somehow, unless EURUSD dips too far, I feel that outcome doesn’t have legs.

So I think today is more about working through the initial developments and confirming whether my preference develops or not and then working from there.

Good trading
Ian Copsey 

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