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HARMONIC ELLIOTT WAVE

Thursday, March 29, 2012

A slight detour in plans


  PLEASE NOTE THAT TOMORROW'S  UPDATE WILL BE THE LAST ENTRY. FROM APRIL 9th 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. 



I was a way from my desk for much of the afternoon and returned just after U.S. open, saw the Euro and Swissie had stalled precisely at my Dollar resistance levels and smiled, turned off my PC and went to the land of nod. Getting up this morning I saw those levels broken. Ouch…

First things first, there’s no change to the Dollar bearish view. The deeper pullback implies one of two things: either the downtrend will be weaker than expected or; confirms a stronger follow-through and given the earlier structure I favor the latter. It doesn’t alter the eventual targets but merely diverts the intervening structures into an alternative route. This is also supported by the deeper pullback in GBPUSD, something which I had warned would be probable before long. It just developed earlier than expected.

I had warned in yesterday’s U.S. Indices report that a deep pullback was probable and that’s what we saw. The implication is still upside in the Indices so the basic correlation holding intact. Next will be correlating the peaks of the Indices with the push lower in the Dollar. I’m pretty certain where the Indices will stall with several common targets ready to be tested.

USDJPY and the cross… Hmmm, the deeper pullback in EURJPY seems to have destroyed the directly bullish outlook. I still think it will rally, and quite certain about that but the implication from what I can see from USDJPY in particular but there does seem to be some risk of recycling. At this point I think the two are more likely to rally again as the cross still seems to require a retest of the 111.43 high but at that point we have to see whether it can push firmly above the daily 111.59 high or recycle lower.

In summary, favor the Dollar resuming losses against the Europeans with just the near-term possibly causing some temporary consolidation. Take care with USDJPY and the cross…

Good trading
Ian Copsey

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