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HARMONIC ELLIOTT WAVE

Thursday, March 1, 2012

A strange day...



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.



Yesterday I explained how GBPUSD had developed in a structure that would make it difficult to slot into a complex correction and as such it implied the extension of the rally. Well, that worked out extremely well… Due to the relatively lower upside target compared to the Euro what I hadn’t bargained for was that EURUSD and USDCHF would just look on blankly as GBP rallied and then turn round and see the two generate a deeper pullback much as had been my original expectation.

However, this does raise an underlying conflict. EURUSD has at least twice the distance to now reach what I consider to be its minimum target compared to GBPUSD. The alternative is that I have the EURUSD structure wrong but that has the knock on effect of a similar problem in USDCHF…

I have similar question marks hanging over the upside expectations in USDJPY and EURUSD that have a knock on impact on the EURJPY cross. Being bullish on the cross is no problem in theory but it’s quite how it’ll get there that produces a bigger problem… As things stand at the start of the Asian session USDJPY looks firm but still has a couple of hurdles to cross but should it manage that the upside in both USDJPY and the cross look good. Indeed, with the expectation of EURUSD resuming its rally the cross looks like accelerating and could well provide the better value for money.

What the Europeans need is for the continental pair to outstrip GBPUSD to begin the larger rally. Perhaps it will mean that GBPUSD will suffer a rather grudging and ratcheting rally to its lesser upside target…

Good trading
Ian Copsey

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