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HARMONIC ELLIOTT WAVE

Friday, March 30, 2012

That was the week that will be…


  PLEASE NOTE THAT TOday'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. 



Given I shall be taking a break over the coming week today’s report will provide both today’s outlook and an overview of the overall expectations for the next seven days.

The depth of the pullback in EURUSD has been a little concerning and I wouldn’t really want to see much more Dollar strength overall otherwise the balance of what I see as the underlying Dollar downtrend. Having said that, USDCHF saw a break above my pullback limit of only 2 points and GBPUSD remained quite buoyant. It does seem that we do really require losses to extend more directly now to maintain the bearish directional bias we have been seeing. Should this not occur the potential may well be for a longer sideways consolidation but clearly with the Dollar seeing further strength above what we have seen these past two days. Indeed, I feel that this Dollar weakness should continue to new lows today else begin to lose the luster and shine that it had displayed last week. Clearer signals will be implied once the 1.3585 high EUR, 0.9016 low USDCHF and 1.6000 high GBPUSD are broken. Failure will require more care and, as I mentioned, higher risk of a pullback higher / consolidation.

USDJPY dipped to new lows in this correction and thus places pressure on the EURJPY cross. Firstly, while I am quite comfortable with the downside in USDJPY and see current levels as a possible mid-point within the correction lower, we also need to restrain too much of a bearish outlook based on the cross which has effectively ruled out a recycling back to 107.51 but appears to now be locked within a sideways trading range, potentially a triangle, before the basic uptrend can resume with more vigor. I suspect the upside in EURUSD will battle with the downside in USDJPY and for what may be the coming week. Once that is complete the implication is bullish for a break above the daily 111.59 high. Therefore watch this 3-way battle as I feel it will provide an outline for the script the currencies following.

As an additional backdrop I still see the U.S. equities as having more room for gains over the coming weeks. The next move should be higher but there are closer projection areas that will provoke further pullbacks and thus the rather rampant performance we have see over the past month is likely to give way to a more 2-way market. This does seem to broadly correlate with the Dollar’s performance also.

Good luck and good trading for the coming week…

Ian Copsey 

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