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HARMONIC ELLIOTT WAVE

Monday, March 19, 2012

It looks as if the Dollar is back on a bearish track…



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No new Dollar highs on Friday and break levels breached to signal a reversal. Thus, it would seem, the Dollar should now be back on a more bearish track. There are still some key Dollar swing lows to take out but I reckon these could be seen today. Having said that, I can’t see the downside extend that far at this point. Today should see swings in both directions and by tomorrow, another minor new low. However, a correction will then be required before it can make any further substantial downside progress so take care during this process.

Now, I had been more inclined towards a long sideways correction after we’d seen the Dollar high but the manner of the recovery in the Dollar appeared more in line with a complete correction and one that should not trigger that consolidation. Therefore, once the Dollar begins to lose out again after the anticipated correction we should see a more direct attack on the final downside target that should form the high for many years to come.

I have been looking at USDJPY a lot deeper again. Things weren’t quite developing as I’d been hoping for so made a much deeper analysis of the entire rally from 76.02 and this brought about some interesting results. The resultant implication is a much stronger rally but not quite so directly. Yes, I think we can see this move just a bit closer to the 85.52 daily corrective high, which had been my final target, but on review it looks like we could see a deeper correction before this pair can push above 85.52.

This will have implications for EURJPY and the dynamic to observe is whether the cross manages to extend higher by having EURUSD drag it by its collar or whether it subsides into a sideways consolidation. This still seems to have some ambiguity and much depends on the timing and correlation of the Dollar’s relative performance versus Europe and Japan.

Today, expect minor new Dollar lows followed by a pullback higher…

Have a profitable week
Ian Copsey 

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