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HARMONIC ELLIOTT WAVE

Wednesday, March 28, 2012

Today should see the Dollar extend losses a bit further


 PLEASE NOTE THAT THE FINAL UPDATE TO THIS BLOG WILL BE ON THE 30TH MARCH. THEREAFTER 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. 



With some minor glitches yesterday went close to expectation, the glitch being the marginal new lows while the overall deeper correction then ensued. Indeed, it looks like reaching the target correction areas early in Asia that should cap for the Dollar downside to resume. Having said that, I can’t see the follow-through being excessive at this point and more likely, once the new lows have been seen we can probably expect a deeper correction that should last into Friday at least I would think.

This still leaves the medium term structure as bearish and for the next leg lower to develop next week so best take advantage of the pullback to provide better selling levels – certainly against the Europeans that still have some way to go to their final targets.

USDJPY is a different kettle of fish. It has been a bit difficult trying to judge the structure of the recovery from the 81.97 low and just how far this can get. It is in a particular ambiguous structure that permits a variety of alternatives including a retest of the 84.17 high. It could even edge even higher and recycle. It could just cap below 84.09-17 and make a deeper foray lower. Perhaps the controlling factor is EURJPY. This reached its 111.24 intermediate target yesterday. However, the pullback is expected to be shallow and for the upside to extend. It’ll only be at the higher projection target that we can expect a longer lasting correction. This could well be controlled by EURUSD, may need some help from USDJPY, but I’m getting the impression that we could see a retest of the 84.17 high at some point. The “love triangle” here should be a core indicator to how USDJPY develops…

AUDUSD stalled just a touch short of the 1.0560-80 target range and has corrected lower. This has helped to solidify the structure. Like the Europeans the downside is limited and we should see the Aussie resume its rally quite soon.

In summary, there’s little Dollar upside left this morning in Asia and thus look for another drop in the Dollar.

Good trading
Ian Copsey 

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