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HARMONIC ELLIOTT WAVE

Tuesday, March 6, 2012

Work in progress


 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. 


Yesterday saw the minor Dollar gains, not quite as deep as expected, but followed by a pullback. The corrections have now come a to a critical point within my primary scenario and they must hold to retain the potential for another follow-through higher. So, you may ask, what would happen if the extension in gains doesn’t develop? From what I can see the answer is a shorter correction to the 1.2623-1.3487 rally. That should not be taken as saying the correction is complete, but more that it may not be as long as I had suggested yesterday.

Do I have a view? Of course! One of the driving factors is GBPUSD. This has two much clearer alternatives although both require further losses. At the very least this must move down to 1.5625-44 but the alternative would have this dropping with a leaden thump way back towards the 1.5233 low. So the correlation with the Euro and Swissie is quite important and as long as yesterday’s corrections hold close to 1.3241 and 0.9100-05 then I think we can see more persistent Dollar gains in all three pairs. The option of a recovering Euro and GBP together breaks the latter’s structure and would cause a lot more confusion…

The prospect of deeper losses in the Euro appears to be mirrored to a degree in EURJPY. The cross has gotten nowhere and looks itself to be within a complex correction that has limited downside and followed by a recycling higher. USDJPY itself has couple of options, the first with limited gains and the other slightly firmer but still destined to see a pullback afterwards. No runaway rally in USDJPY just yet I feel.

So for today my preference remains for the Dollar gains to continue and we’ll have to judge as they develop just how direct or choppy they are.

Good trading
Ian Copsey

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