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HARMONIC ELLIOTT WAVE

Thursday, March 15, 2012

Towards the last leg


 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. 



 
The market can be strange sometimes. I made my preference for the Dollar to extend gains yesterday partly because of the structure but with the helping hand of GBPUSD which I thought would see losses. The Dollar extended its gains against the Euro and Swissie developed to Dollar resistance levels I indicated but GBPUSD remained static within a trading range… This rather unexpected failure for GBPUSD to drop below 1.5600 bugs me a little in terms of the downside that I had been expecting. I’m left look at the decline from 1.5991 and thinking “this just doesn’t fit a bullish structure” and wondering why we’re not seeing any larger drop…

I have to say also that we’re now reaching levels in the Dollar against the Euro and Swissie where I think we need to begin to take more care. There are early signs of momentum slowing, particularly in the 4-hour charts and while I do feel that we should see one more push higher there is still risk of a pullback first. The entire picture has become quite complicated which is, in some ways, not too surprising given I still feel this is a complex correction. As much as ever this requires a solid level of caution as the final stages play out.

Another deviation from expectations came in USDJPY. The rally is not only a bit too deep for what I was expecting at this stage but it has also not developed in the manner that implies a top. Indeed, working through the price action from the 76.02 low the number of deep corrections is extremely limited. The pullbacks that are deeper do not seem to fit into the structure at the right spots and the follow-through has been stronger that would normally be expected. What’s more, momentum remains extremely perky and while that doesn’t rule out a pullback there are no overt signs of such. As such, don’t fight the trend… this could get much closer to the 85.52 daily corrective high … and that could help EURJPY retest the 109.95 area again…

In summary, I can’t see this being a day to be a maverick in the Europeans… there could still be a sting in the tail so take care.

Good trading
Ian Copsey

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