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HARMONIC ELLIOTT WAVE

Friday, March 2, 2012

Dollar losses to end the week?


PLEASE NOTE THAT OVER THE NEXT 1-2 MONTHS 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.


That was a day we can pretty much forget about… The Dollar edged a bit higher against the Euro and Swissie although lost some ground against a firmer Pound. While the continued pullback against the former two was not on my list of preferences it certainly hasn’t broken any major resistance levels and indeed there could be a little more to go today, I still cannot see that we have completed the move lower in the Dollar. I’d want there to be a more substantial push higher before it forces me to turn my head.

However, the deeper the pullback, the greater the twang in the opposite direction will be required, particularly against the Euro. USDCHF could actually do with marginal new high. What has made life difficult for me this week has been the disconnection between GBPUSD and the continentals. That EURUSD has seen a deep Wave (b) has tended to match with the deeper Wave -iv- in USDCHF and it’s the Swissie that leads me to feel that there may be just a little further to go.

However, it’s hard to see this lasting the entire day so the odds favor a resumption of the underlying Dollar downtrend by the end of the day. We may just face a role reversal between the continentals and the Pound given the relatively limited upside that it faces, so the bigger potential lies with the former pair.

USDJPY did not follow-through higher either and may well lapse into a sideways consolidation that could last well into next week. I certainly wouldn’t fight a direct rally as there is still more upside to come. However, it’s best to have any rally confirmed. The combination of EURUSD and the limited downside in USDJPY should mean that we see EURJPY begin to move higher again. I can’t rule out a minor new corrective low should USDJPY dip towards its range low first, but the resumption of gains must be judged mainly on EURUSD and only add in USDJPY if that decides just to extend gains. However, that does look like a powerful cocktail for the upside in the cross…

Have a great weekend
Ian Copsey

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