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HARMONIC ELLIOTT WAVE

Monday, March 12, 2012

Mixed signals…


 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 may need to get to Plan A - the one calling for a longer period of consolidation. Friday’s Dollar rally blew the thoughts I had developed right out of the window. While EURUSD hasn’t actually broken below the 1.3096 low the marginal new high in USDCHF and the drop in GBPUSD have made it hard to ignore the potential for another push higher in the Dollar. It’s hardly a crystal clear picture though with plenty of conflicting signals from different areas, including U.S. equities that barely flinched at the higher Dollar.

If there is any main theme I can identify that appears the most consistent it’s the … err… inconsistency. Well, perhaps not, but something somewhere needs to give way to make this all gel. At this point I am more in the mind of suggesting that while we may see marginal new Dollar gains today, as long as they don’t extend too far, we could see one of those recycling moments to get back to Thursday’s Dollar low extremes. Even if that does happen then the apparent next move would be higher again.

That said, I don’t think it would be too wise to place all eggs into one basket. There are multiple possibilities and today is one of those where we should be taking small steps and testing out the waters to judge which one of these alternatives will develop. The one currency pair I do feel is probably more vulnerable is GBPUSD. I had been rather surprised with the depth of the pullback but Friday’s renewed losses do seem to bring this back onto a more bearish track. It would best be aware of the risk for quite solid losses.

USDJPY pushed higher firmly. That too is due a pullback lower but there’s still another new high to come but the entire rally is coming to a more volatile period so this doesn’t look like extending gains aggressively. That probably places EURJPY into a sideways trading range and thus the focus will be on which sideways consolidation pattern it assumes…

Take care today and test the waters first…

Have a profitable week
Ian Copsey

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