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HARMONIC ELLIOTT WAVE

Tuesday, March 31, 2009

Dollar-Yen should renew its rally while the Dollar may lose out against the Europeans

Well, so much for expecting a correction before the Dollar made further gains… It made it’s intentions well know early in European trading and blew a hole through all the resistance levels I thought would hold and in many cases extended those gains to the levels that I thought we’d be seeing today or tomorrow.

At the Dollar’s peaks yesterday we did see bearish divergences form so it’s not impossible that we have already seen the full extent of the correction from the Dollar lows seen around 10 days ago. A resumption of the medium term Dollar decline against the Europeans hasn’t quite been confirmed so we should hold back a little until these confirmations have been seen. Until then there is still the slight chance that we could see one more rally.

One of the reasons for my caution is that I am not totally convinced that we have seen the low in GBPUSD. My favored target remains between 1.3842 and 1.3948. Yesterday’s 1.4110 low was a valid projection but it does leave the low in an area which doesn’t seem to fit in with the larger picture. Thus while the 1.4347-67 (max 1.4421) area holds any pullback beware of another spike lower. However, once it reaches my target I’ll be looking for a sizeable recovery then.

The exception to the Dollar’s strength was USDJPY which failed to overcome the required break level to send it higher. This triggered losses which promptly moved to just a little below my 96.20 support. I am ever-aware of the daily cycle high due at any time but until yesterday’s low breaks I’ll still prefer a scenario that calls for a move above 102.00 over the course of this week. That event should signal a reversal…

The losses in USDJPY spilled over into the JPY crosses which extended losses more than I had anticipated. It does make me a touch uncomfortable but they do look bullish today.

USDCAD rallied exceptionally well and to even just above the 1.2630 target. We should see a pullback at the very least but we need take care as it is smack in the middle of a very indecisive area since I feel it should rally just at the time where I’m expecting the Dollar to be generally weak.

Today’s free analysis is for USDJPY and can be found on
http://www.fx-forecaster.com/DailyForecast.html along with yesterday’s trade set ups. Details of the upcoming technical trading webinar can be seen on http://www.fx-forecaster.com/TechnicalTradingWebinar.html.

Good luck.
Ian Copsey

Monday, March 30, 2009

Today should see a correction to Friday's Dollar gains

Friday did see the break out of range, a little earlier than I had expected, but saw the Dollar recover. Thus we are seeing a correction to the decline from its peaks at 1.2445 EURUSD and 1.1966 USDCHF. However, over a weekly view I don’t think we’re going to see Dollar strength being maintained over the entire week and maybe we’ll see the top by mid-week.

The underlying move is still Dollar negative and this is expected to extend into mid April, possibly the third week before a deeper and more sustainable correction.

However, not all currencies are following this broad expectation of new lows for the Dollar as I have my doubts over GBPUSD. Here the losses we have seen thus far have been too deep, in my opinion, to indicate a break to new highs above the 1.4777 high. However, nor have the losses been deep enough to suggest that we’re on a new downtrend. From those two statements it is clear that the only alternative is a period of sideways consolidation but this week does seem to indicate some modestly deep losses which I suspect could reach the 1.3842-1.3915 area.

The follow-through in the Dollar’s gains on open this morning surprised me a little but I don’t think it’ll see much follow-through. More likely today should see a correction and quite when the anticipated final Dollar rally occurs this week will depend on what pattern this earlier correction takes. Thus we’re going to have to watch this correction first.

USDJPY is a little unclear. It fell a little more than I expected for a short term rally but not enough for a final push to the 102-103 area. Well, if there is any stronger argument it is for stronger gains and we can’t ignore the fact that tomorrow is the Japanese fiscal year end and this can produce some anomalies. We are due a cycle high overall here around this time frame – either this week or early next so be aware of the risk of a sharper decline.

AUDUSD should follow the rest of the pack while USDCAD still needs to recover more. The JPY crosses also need to lose a little more but recover towards the end of the week.

Today’s free analysis is for GBPJPY and can be seen on http://www.fx-forecaster.com/DailyForecast.html along with Friday’s trade set ups. Details of my upcoming technical trading seminar are on http://www.fx-forecaster.com/TechnicalTradingWebinar.html.

Have a profitable week.

Ian Copsey

Friday, March 27, 2009

Dull trading conditions continue but break is expected soon - maybe late today

The market had the option of pushing the limits or taking the easy route and let sleeping dogs lie yesterday. What did it choose? With the exception of GBPUSD and USDJP it chose the quiet route which saw almost everything stay in narrow and rather erratic ranges. The set ups that occurred required close management but the set ups were all positive with the exception of one in GBPUSD.

So, what do we have in store for today? Pretty much the same frankly. I find it hard to see any breaks of ranges unless the consolidation patterns are completed before the end of the day. It certainly means that we are likely to see both Asia and Europe extending the lethargy with any real break coming out of North America – if indeed any actually do occur.

The good news is that next week could well see more movement. It will all depend on which break levels are breached and if I have any preference then I’m moving more towards the Dollar bullish side. The continued strength in USDJPY is encouraging as was the decline in GBPUSD yesterday. There are still a few more hurdles to overcome and one of those may well be a short term spike lower for the Dollar, but I do see a growing level of Dollar bullish evidence.

Therefore, today take it easy for the first two sessions at least. I’ll describe all the closer barriers in the individual analyses today and these should be watched for trade set up patterns.

Today’s free analysis is for EURJPY and can be found on
http://www.fx-forecaster.com/DailyForecast.html together with yesterday’s trade set ups.

I am in the final stages of preparing a 3-4 session webinar on trading technically and hope to launch these in April. See
http://www.fx-forecaster.com/TechnicalTradingWebinar.html for more details of how to fine-tune your trade set ups and improve your profitability.

Have a great weekend.
Ian Copsey

Thursday, March 26, 2009

Range bound market continue to frustrate but a breakout is due soon

Following the Dollar’s sharp losses last week the past 3 days have given little indication that it is about to resume the decline. Having gone through all the currency pairs this morning, the strongest correlation across the pairs in terms of how the wave structure appears to be developing and therefore heading is in the Dollar’s upside.

I’d like to see this for several reasons:
· The cycles are still bearish for GBPUSD and a break above 1.4984 would be tough to incorporate
· I still have this 102.46-103.46 upside target in USDJPY
· The declines in EURUSD and USDCHF have been swift and without any real deep correction

However, if I look at the Dollar’s lows there was very little indication from momentum that we had found a low and either way the entire wave development this week has hardly been encouraging and nor has it broken any key Dollar resistance levels.

However, however this does develop over the next day or two I do feel that a larger break out of this week’s ranges should be seen very soon. Either it will be today or the erratic and choppy correction will continue before the eventual break out.

Very clearly the past few days has been rather frustrating with minor breaks outside of expectations, failure of the normal trading patterns and this is an obvious sign of the corrective nature of price. Thus, until the key levels are broken it will be prudent to assume that this type of price development will continue. In general there are some boundaries to the correction, some I can identify and some, where the earlier wave development was choppy, have less clear boundaries.

Therefore I shall concentrate on those pairs where I have a stronger feeling of where the breaks are and it will be useful to cross check between currency pairs to see if these breaks look correlated. Until the larger breaks are seen just take profit when you can and don’t worry if you miss the larger break – once it happens the picture will (hopefully) clear up and provide stronger support & resistance levels.

Today’s free analysis can be found on
http://www.fx-forecaster.com/DailyForecast.html together with yesterday’s trade set ups.

Good luck.
Ian Copsey

Wednesday, March 25, 2009

The directionless conditions are causing confusion and we'll have to work with breaks today

It didn’t get any easier yesterday with the Euro and Swissie remaining quite flat over the day while Cable pushed a little higher though stalling short of target. Perhaps the best move was in Dollar-Yen which was pretty firm all day until it stalled just above my 98.42 resistance.

What can I make of this? Well, firstly the Dollar-Yen does seem to keep us in the bullish structure and while the correction lower may well continue today it should eventually imply a retest around the 99.67 high – maybe a touch above – but then a moderately deep correction.

How does this slot in with the Europeans? Well, first thing I have to say is that they all look to be in corrections and these are times where correlation can break down at times. However, while the Euro can remain above yesterday’s low there is a scenario that would call for gains back to 1.3583-00 but then I’d expect lower. The Swissie is in the high end of its range so a small dip (again within range) cannot be ruled out.

The link between all of these is a brief period of Dollar weakness followed by some strength and then I’d expect the Euro to get stronger, the Swissie weaker and also Dollar-Yen. Thus, this is what I shall concentrate on but I have to add that overall we are seeing corrective type structures and thus we should fight against a break in either direction when seen…

The Aussie still looks firm and Dollar-Canada, while messy, still has potential for one more dip.

As for the JPY crosses, the strength has clearly caught me by surprise and I feel there is more to come but in the short term we still have the corrective structures that may still keep price in a range or indeed continue the correction from yesterday’s highs. They are probably best left alone today considering the complications coming from the corrections in the Euro, Pound and Dollar-Yen…

Today’s free analysis is available on
http://www.fx-forecaster.com/DailyForecast.html along with yesterday’s trade set ups.

Good luck.
Ian Copsey

Tuesday, March 24, 2009

I'm still expecting one final push lower for the Dollar against the Europeans...

The JPY crosses do seem to be leading the way for Dollar-Yen but they have pushed above my target resistance which appears to suggest that the market is happier shorting the Yen against the Europeans versus Dollar-Yen. It is of course weakening against the Dollar but the rally has been rather strange and I’m finding it hard to fit a logical wave count here… Due to the shape of the decline to 93.54 it does look as if Dollar-Yen is back on the path towards 99.67 and eventually 102.46 but the manner of the rally does concern and it’ll be well to be cautious here.

The Europeans on the other hand remained more in tight ranges. The Euro did challenge the 1.3737 high again but failed while the Pound edged to a marginal new high and before the Dollar losses later in the day the Swissie did manage to breach the 1.1310 resistance but failed in the follow through.

It does seem to have the making of further Dollar weakness against the Europeans though as mentioned yesterday I am not too convinced this will move too far. Momentum is definitely slowing and that larger correction should develop before too long. I’ll advise all the support & resistance levels in the individual analyses. However, today I feel the final supports will be a little lower than I was considering yesterday.

This should continue to push the JPY crosses higher but again I can’t see this continuing for too long. We shall come to a point where either the Dollar will pullback sharply against the Europeans – or Dollar-Yen will deliberately annoy me by dropping earlier than anticipated…

The Aussie is much in the same boat – expectations are a little higher than yesterday but Dollar-Canada is still expected to find a low around the 1.2124 area and trigger a reversal.

Today’s free analysis is for GBPUSD and can be seen on
http://www.fx-forecaster.com/DailyForecast.html along with yesterday’s trade set ups.

Good luck.
Ian Copsey


Monday, March 23, 2009

In what could be a messy day I feel the risk is still for limited Dollar losses

It turned out to be a fairly dull end to the week on the whole seeing the consolidation continue over Friday but without really breaking the Dollar’s downtrend. We are therefore faced with the same question of whether we’ll see new Dollar lows and if I look at the momentum picture in general across the currency pairs I still feel that we shall.

During last week I lost out from anticipating a larger correction but I’ll stick my head out ready to be chopped off once again in saying that there does seem to be an argument for this to happen. Basically, if I look at the JPY crosses I sense that we are close to highs here. EURJPY seems to have a 132.18 minimum target and potentially 132.65-133.12. GBPJPY, well, I’d prefer not to see new highs here but there does seem to be a risk of a move back very close to the 141.77 high…

If I’m correct here then it will mean significant highs. At that point we either need Dollar-Yen to crash below 93.54 or it has to be generated from the Euro finally heading for a correction. Maybe both will happen… It’s not impossible but I still have this 102.14-50 target area in my mind. The drop seen last week did rather surprise with the depth but even from the 93.54 low I can still generate targets above 102.00.

It is a balance between these two blocks – Japan versus Europe – and I feel that these relationships are the ones to watch to provide the final pointer to how the next move will develop.

Even elsewhere it seems to me that Dollar-Canada has little room on the downside – probably maximum the 1.2124 area and while the Aussie does seem to need another push higher I feel this pullback is coming to an end too. The pullback in the Aussie was always going to be a shallow one and indeed it has been but the upside does look terminal and I am watching the 0.7088-0.7113 area in particular.

Thus today could be a little messy with the JPY crosses already pushing higher as Dollar-Yen recovers from the dip seen at today’s open and with the Dollar also soft against the Europeans. It does tend to have an aura of seeing Dollar-Yen poking its head a little higher but once Dollar-Europe pushes lower we could see a deep correction even in Dollar-Yen also.

Take care today.

Today’s free analysis is for USDCHF and is available on
http://www.fx-forecaster.com/DailyForecast.html along with Friday’s trade set ups.

Have a profitable week.
Ian Copsey

Friday, March 20, 2009

There are signs of an end to the current losses but I can't rule out another attempt lower...

Very clearly there are a great deal of Dollar longs being disposed of … It is very hard to identify the wave structures in the Euro in particular and also in the Pound. I am having to rely on indications from my RSI and trying to relate potential projections to identify the areas that offer greatest risk of the move stalling.

As things stand now all four majors do have Dollar bullish divergences just about showing in the hourly chart but not in the 4 hour. This tends to suggest that a short term correction is close but probably not a more sizeable one. The holiday here in Japan should bring a few hours of consolidation and may well sap the strength of momentum and thus we are left with what is probably a pretty obvious choice: Either we see a minor new low in the Dollar and then a moderately deep correction… or we’ll see more of the same pretty sharp losses maintained...

I can generate some projections that suggest the former is true and thus we can attempt to look for reversal patterns at those levels and I’ll detail these in the individual analyses.

What I can say pretty definitely is that the Dollar’s strength against the Europeans has gone and we shouldn’t get any sizeable gains until Q4. Dollar-Yen, while below 93.83 does present more of a mixed outlook. The pullback has reached almost a full 50% of the rally from 87.10. This does tend to argue that we may have seen the top at 99.67. However, I do note that a projection higher from last night’s 93.54 low could still reach the 102.14-46 target. I have to say it seems a rather weak argument but keep it in the back of your minds. However, at some point we should get some sort of pullback as the next major support is not until 91.89 and it is unlikely this test would occur directly.

Both JPY crosses appear to be mired in a messy sideways consolidation that looks very much like triangles while Dollar-Canada has support around that 1.2124 low and somehow I feel we’re going to get a move right back up to 1.3063-00 once again… For the moment the Aussie upside appears limited to now.

Today’s free analysis is for EURUSD and can be found on
http://www.fx-forecaster.com/DailyForecast.html together with yesterday’s trade set ups that identified some good profitable set ups.

Have a great weekend.
Ian Copsey

Thursday, March 19, 2009

The Dollar's cycle high appears to have come earlier than expected...

What can I say? I did expect a new high in the Euro… but not this high… In some ways there were some solid calls for trades on breaks but the downside was there was a uniform lack of trade set ups to really confirm those breaks…

It’s pretty hard trying to make sense of the structure right now but stepping back a notch we can at least say that there’s very little way the Euro can move back close to 1.2455 again – and even if it did I’d treat it as a correction. The Swissie being unceremoniously dumped below 1.1675 was another surprise and surely that means the Dollar cycle high I had been expecting to see by the end of next week is already in place. This implies basic Dollar weakness – or perhaps a sideways consolidation - into August/September.

Now, in all the moves seen yesterday there was another interesting snippet. EURJPY has pushed to new highs and does seem destined for another hike while GBPJPY didn’t really budge very far. I do feel that GBPJPY has seen its high and therefore the risk is sideways to lower. The implication is for the Euro to push higher while losses in Dollar-Yen remain limited and for any gains in Cable to remain limited – or perhaps we have even seen the high already.

Thus, when a correction to the Dollar’s slide does come I still feel that Dollar-Yen can still make the 102.46-103.42 area while Cable can also dip quite strongly. However, in the meantime we are going to have to remain quite cautious as the sort of price shock we saw yesterday tends to generate a certain degree of reluctance by the market to push new limits, or if it does then it is short lived.

Momentum-wise there is nothing to suggest that the Dollar’s decline is complete. For today that translates into uncertainty over whether a correction develops directly or whether we’ll see one more push lower before that correction begins. If I have any preference it is for a marginal new low for the Dollar.

So take care today. This should be the toughest and by tomorrow we should see things settling down enough to get a greater understanding of the next move.

Today’s free analysis is for USDJPY and can be found on
http://www.fx-forecaster.com/DailyForecast.html with yesterday’s trade set ups…

Good luck.
Ian Copsey

Wednesday, March 18, 2009

I still look for the Dollar to weaken one last time

And the winner of the most boring currency is the Swiss Franc... From Friday we have seen only an additional 32 pips lower… At least most of the other currencies tried to emulate its feat yesterday which provided one of the most boring sessions since Xmas Day…

However, the good news is that at some point this narrowing of ranges will cause some stronger movements by tomorrow at the latest and maybe we can expect a little more today. Overall the situation explained yesterday remains the same. There hasn’t been any strong bottoming signal in the Dollar yet and therefore there is potential for another dip lower, unless the market chooses to have another day off.

The problem we face in that case is just where to trade. I can see potential for flat corrections or even expanded flat – which explained in non-Elliott language – can mean a retest of the recent extreme (ie the 1.3070 high in the Euro) but then another dip to yesterday’s low or we could even see a small overshoot and then retracement to yesterday’s low. However, if the Dollar’s downside extends today directly then we could see the ultimate lows in this cycle and as long as this is accompanied by bullish divergences we can see a larger reversal higher.

When I consider the Swissie I certainly feel that we should be seeing a dip to 1.1730 at a minimum and can’t rule out a test of the 1.1675 pivot area. If Dollar-Yen does the same thing there is still quite a large window for a decline – as far as 94.69.

Thus today I’m going to have to describe as best I can the general limits for each possibility but this will mean that extra care is going to be required to identify what is happening next. If I have any stronger beliefs then it is the Dollar downside that I would go for because of the Swissie and potentially the Yen.

Elsewhere, much as I suggested, the JPY crosses had a positive day though hardly exciting and, again, unless this turns into a longer correction there does seem risk for marginal new highs but with a growing risk of reversal lower which may just indicate the weaker Dollar-Yen scenario.

Today’s free analysis is for USDCAD and can be found on
http://www.fx-forecaster.com/DailyForecast.html along with yesterday’s trade set ups.

Good luck.
Ian Copsey

Tuesday, March 17, 2009

Mixed signals but the Dollar looks to weaken further

I have to say I was quite stunned as the Euro and Cable pushed higher yesterday. Not so much in Cable, but the break above 1.2990 was just not in line with my expectations and given the relatively short time frame to the anticipated Dollar cycle high I have to consider that we may have seen the low at 1.2455. However, given the cycles are pointing lower I feel I must keep open some sort of scenario that could see one more move lower.

This event has also caused a subtle change in other areas. I mentioned yesterday the way the balance between expecting EURJPY and potentially also GBPJPY seeing new highs with the clear target in the former being at 128.62-68. Well, that played through really well and indeed stalled just 4 points above that range.

Now, because of that I really want to be bearish for the JPY crosses although I don’t really see too much evidence from momentum that the final peaks have been seen. If we do see these pairs lower then it can be seen through a drop in Dollar-Yen now… What is more, the Swissie also edged lower and opens up the possibility of even seeing the 1.1730-71 area. I wouldn’t rule out 1.1675 but I very much doubt that. The issue for the Swissie is that it still appears to be overawed with the prior support line. This is rising at a rate of around 200 points over 2 weeks and this should then see it around 1.2250-00 just in time for the cycle high.

So there are a lot of variables swishing around right now that make life just a little more complicated. The biggest of these is the fact that there were very few instances where momentum really displayed any divergence against the Dollar’s recent losses and thus this keeps me on alert for further losses…

I get the impression that it’s going to be quite difficult to have any great assurance about the next move, especially about the extent. Therefore it looks like a day to work with breaks but be certain to demand a solid continuation pattern to point the way and provide profit taking targets.

If I have any firm opinion it is that the Euro does seem to need one more high at least and we could be talking about a move as far as the 1.3233 area. If this begins to develop then watch out for the downside targets in the Swissie and Dollar-Yen.

Today’s free analysis is for GBPJPY and can be found on
http://www.fx-forecaster.com/DailyForecast.html along with yesterday’s trade set ups.

Good luck.
Ian Copsey

Monday, March 16, 2009

The Dollar should soon begin it's final rally for the next 6 months...

I found Friday a bit of a strange day. It wasn’t too far from what I was expecting but everything seemed to be in slow motion. Of note where the peaks at 1.2955 Euro and 1.4067 Cable which were right in line with my maximum expectations for both. So now what…

Well, over the weekend I wrote an article for The Forex Journal (this can be found on
http://www.fx-forecaster.com/files/Dollar_Cycle_High_looms_in_April-May.pdf) that outlines the next two weeks will probably see the Dollar reach its highs for at least 6 months and maybe the rest of the year. There is one exception in Cable which looks to me as if it will remain weak into the middle of May but should also see a bounce around the turn of this month. From that time the Dollar should be quite weak – mostly against the Pound and Yen.

So, that tends to fall in line with my outlook for the Euro and Pound to weaken and the Swissie and Yen to rally. What we now need to do is navigate our way around this anticipated Dollar strength.

Friday should have seen the Dollar lows in general and thus I’m looking for the dip in the Euro to 1.2730, in Cable to 1.3697-30 and in the Swissie a rally initially to 1.2040-75. Those areas are expected to provoke corrections so by late tomorrow or Wednesday the Dollar should then be pushing higher again.

I’ll cover the Yen separately as I have to balance the outlook for the JPY crosses with Dollar-Yen. I have remained fairly steadfast in looking for a pullback to 94.69 in Dollar-Yen. The problem I have now is that Euro-Yen does seem to need one last push to the 128.60-70 area before that peaks. Sterling-Yen has peaked already so here the question is whether the correction can push any deeper and I feel there is a scenario that would allow a move to 140.50-00.

A falling Euro-Dollar and Dollar-Yen would destroy the bullish Euro-Yen expectation so we have to be aware of the permutations that may allow a dip in Dollar-Yen but still retain the chance that Euro-Yen does rally one more time. I do have an underlying view of Dollar-Yen eventually reaching 102.50-103.50 but this will need the Euro to have dropped below 127.30. Thus it’s this intervening period over the next day or two which needs monitoring.

Probably the currencies to concentrate on today are the Europeans which should see the Dollar gaining…

Today’s free analysis is for EURJPY and can be found on
http://www.fx-forecaster.com/DailyForecast.html along with Friday’s trade set ups.

Have a profitable week.
Ian Copsey

Friday, March 13, 2009

Today looks a critical decider between bullish & bearish

That was a topsy-turvy day... Everything looked to be going perfectly to plan for half of the day. Trade set ups triggered, profit targets met and it appeared the potential for the Dollar to begin pushing higher again. Well, I guess that is true for the Swissie – which I pointed out yesterday as potentially having a reversal signal that would be triggered by a breach of 1.1675 and indicated a move back to 1.1914 and possibly 1.20… Nice call... but I had no thoughts of this occurring within one day – and certainly not one-hour…

Cable is beginning to bug me. The cycles are clearly negative but even when the opportunity to take another spike lower comes it looks at it with disdain and takes another pullback. It is frustrating and now that the Euro is pushing close to the 1.2990 swing high, a break of which would imply a larger reversal higher, I am watching with some concern.

However, if I look at the manner in which the Euro recovered from 1.2455 it is really difficult to see this as constructive and with a bearish divergence in the hourly chart – as long as it holds it still fits into my channel decline that should revisit the 1.2328 low. If the bearish divergence is broken… well… it would seem as if we’ll get an early demise for the Dollar.

Until that point, however, I’ll stick to my guns and still look for the Dollar to push higher. The only problem I have with this is the overhead, prior support line in the Swissie which lies around 1.2000-40 and threatens to restrain any real strength… Maybe it will sail through, and if so then we can begin to plot its course for the 1.2296 high and maybe a little more to 1.2356.

Even Dollar-Yen caused me some confusion. It dipped earlier than expected – about which I was reasonably satisfied but the reversal higher was so strong it does threaten an early resumption of the uptrend. I still somehow doubt this since the pullback has been deep enough to suggest there is no impulsive move. What we require here is a break below 97.00 to extend losses to the ideal 94.69 support which is also the ideal launch pad for an attempt on 102.14-50…

Watch out for a strong dip in Dollar-Canada if it falls below 1.2710-35…

Today’s free analysis is for AUDUSD and can be found on
http://www.fx-forecaster.com/DailyForecast.html along with yesterday’s set ups that produced positive trade sets ups that could have produced over 200 pips profit…

Have a great weekend.
Ian Copsey


Thursday, March 12, 2009

There is growing evidence for Dollar strength resuming

Yesterday was an ok day. The set ups provided some sound trades but it is best to very strict with these to retain a high percentage of winners. The Euro rallied as I warned it may and having gone to the sort of areas I have indicated should provide a high we need to begin to look for a larger topping pattern and for a reversal back lower. I can’t say for certain whether yesterday’s high is the final high or whether there will be one more minor peak.

Indeed, I can’t be more insistent about this turn higher for the Dollar. There are early signs that the Swissie may have completed it’s decline already, I remain bearish for Cable as you know and I can’t see very much more on the upside so the risk of a reversal does seem very, very close.

The only inconsistency I can see is with Dollar-Yen which dipped very nicely yesterday and I remain bearish here too just for a little while longer. My favored target is still some way lower at around 94.69. This then begs the question over whether a Dollar rally against the Europeans will be reflected in Dollar-Yen.

Well, GBPJPY has already broken down. It isn’t accelerating as quickly as I would have liked and there may be a slight delay since I see an intermediate support not too far below where it is right now, but overall my next target over a period of time is closer to 113.50. EURJPY has also become rather reluctant to manage a break above the 126.07 high. It hasn’t broken down quite yet but I am having growing concerns that it will. A break below the 135.54 low would seal its fate for sure.

Thus the main message is beware… but wait for breaks. Until then there is a small chance we could see some consolidation ahead of the final reversal and this needs to be allowed for.

The Aussie also looks close to a peak. There is still some uncertainty over whether it can generate a final push higher but the clear break level here is first at 0.6460 and then at the 0.6398 lows… Once these go the Aussie will be heading lower… Dollar-Canada is in a holding pattern and in the same boat as the Aussie… A break below 1.2700-20 here would be the big bearish trigger.

Today’s free analysis is for GBPUSD and can be found on
http://www.fx-forecaster.com/DailyForecast.html along with yesterday’s trade set ups which identified three profitable set ups and no losses.

Good luck.
Ian Copsey

Tuesday, March 10, 2009

Complex patterns abound and confuse

The Euro is causing lots of problems… All the way back from the 1.3384 corrective high it is almost as if there is no real structure to the decline. It is so chaotic that it has forced me to consider an alternative pattern that really doesn’t occur that frequently. The problem with this pattern is that pullbacks tend to be much deeper than normal while the usual wave relationships get thrown out the window. Suffice it to say that the wave structures become exceptionally chaotic and indeed make forecasting really very tough.

Without a doubt the highs here all the way back to the 1.3384 high have been edging lower although the corrections to those highs have been exceptionally deep each time. In some ways it does suit the underlying view that the bearish cycles are implying a low over the next few weeks. If you consider the type of movement to which we have almost become to expect – the rapid directional trend that take your breath away – this recent development does seem to surely highlight that the market is perhaps getting over-extended in its emotional wish to see the trends continue.

The problem is that we still have a few weeks of this and it is really very difficult to judge quite how far this will go. Even the Swissie which looked almost nailed on to continue its decline just couldn’t force it way below the old 1.1460 low seen right after the 1.1883 high. If we fail to see any further losses today then the pattern is beginning to remind me of a wide swinging triangle that would force it higher again, eventually (and not directly) to a new high. However, Cable did do what is expected of it in terms of the long term targets. Yesterday’s decline was part of my thoughts but I wasn’t actually certain that it was to happen yesterday. This still has further to go although I can’t rule out a correction higher today.

Dollar-Yen refuses to lie down and die too. I do have a target closer to 102.00-50 but the structure would look much nicer if we had a deeper pullback. I can’t work out whether yesterday’s rally was just a pullback or part of the next leg higher to target. However, if we consider the general cyclic expectation of a Dollar high which should ideally occur around about a month’s time the prospect does appear to be for some pretty erratic corrective trading before the next leg higher. Remember, I am a massive Dollar-Yen bear for this year and to new historic lows below 79.75 and if the Dollar is finding a cycle high in around a month’s time it does seem convenient to consider that Dollar-Yen should reach 102.00-50 at the same time as Dollar-Europe tops out…

Today could well be another messy day so I feel more like sitting and observing than getting my hands dirty with risky trades…

Today’s free analysis is for EURUSD and can be seen on
http://www.fx-forecaster.com/DailyForecast.html together with yesterday’s set ups…

Good luck.
Ian Copsey

Friday, March 6, 2009

There does seem to be risk of a quiet end to the week...

The mixed signals and puzzled expressions that clouded my face yesterday morning seem to have described yesterday quite adequately. I haven’t looked in the mirror this morning to see what the day will bring but I feel a bit tired and sleepy now the end of the week has arrived but this does seem to be suitable expectation for today.

The Euro fell back lower while the Swissie stalled quite nicely just above the 1.1780-00 area and has drifted back. The Pound rebounded almost perfectly from 1.4226 and the Aussie dipped back lower. Dollar-Yen became spiteful by stalling in the middle of nowhere for the second time and confounding the wave count I had been following.

Maybe I’m describing my thoughts right now, but it looks very much that once again the market has no great conviction to push the extremes very much at all and on the whole it just seems as if the Dollar will limp into the weekend on a quiet note.

There are perhaps two events to really note. The first is the bearish Key Reversal Day in Dollar-Yen. I have been looking for a deeper correction lower but have struggled to identify just when that will arrive. I am still basically long term bearish into Q3 so this rally has caught me out in the short term but I feel that we could do with a bearish divergence developing in the daily chart. Right now my RSI is very high and so my wish has been for this to fall back lower to allow one more push higher to fail around the 102.00-50 area. Perhaps yesterday signaled that the decline is underway. Having said that key reversal days can cause inside bars and a brief consolidation before the next move and so I come back to the same conclusion for today’s outlook.

The Yen crosses too failed to push back above their highs and there is therefore a growing risk that we may just go lower directly. Watch these over the coming days.

The other event yesterday was that high in the Pound which does fit hand in hand with my bearish outlook for the coming month but even then the pullback we’ve seen this morning does appear to imply this too will consolidate before the next move…

Today’s free analysis is for GBPJPY and can be found on
http://www.fx-forecaster.com/DailyForecast.html together with yesterday’s trade set ups for the levels highlighted in The daily Forecaster.

Put your feet up, have a nice cup of coffee and have a great weekend.
Ian Copsey

Thursday, March 5, 2009

Mixed signals today make this a day of caution...

Three to six months ago we were getting used to prices moving aggressively in one direction. How times change… Just as I thought we could squeeze a little more out on the Euro downside it promptly reverses. This worked well with Cable which had a preference to recover and perhaps ironically in the Swissie which seemed to need to say goodbye to that overhead trend line just one more time…

What’s more Dollar-Yen pushed up through the 99.05-35 resistance also. This helped the Yen crosses but leaves the straight Dollar-Yen pair seemingly wanting to push the 100 area…

So I’m left just a little puzzled with mixed signals in many places. The Euro seems reluctant to push directly above the 1.2684 swing high but the Swissie does appear to have a much greater chance of seeing further, quite solid losses. To throw even more into the melting pot Cable has just bounced from the 1.4206-26 resistance with a small bearish divergence…

So I’ll start the day being more on the Dollar bullish side but with a few nerves. There is room for the Swissie to pullback further even if the simpler wave structure suggests straight losses. However, I’ll be watching certain areas quite closely for reactions. With this ambiguity perhaps we should also be prepared for a narrow range trading day…

I’ll start with a cautiously bullish view on Dollar-Yen too aiming for the 100.00-20 area but I’m really not too keen on a stronger move at present unless that barrier breaks. The larger picture does suggest a test to 100.76 at least while other targets are around 102.10-50 but I hadn’t anticipated this more direct route…

The Yen crosses are mixed with minor bearish divergences in the hourly charts and the levels they reached yesterday crucial to the next step higher. We just need to watch key support areas in these since if these breaks it will tend to push the structure in favor of a larger daily consolidation. Take care with these today…

Finally the Aussie is a bit mixed while Dollar-Canada threatens to resume the uptrend...

Today’s free analysis is for EURJPY and can be found on
http://www.fx-forecaster.com/DailyForecast.html together with yesterday’s set ups for the highlighted support & resistance in The Daily Forecaster.

Good luck.
Ian Copsey

Wednesday, March 4, 2009

Dollar gains against the Europeans should be limited today

Yesterday’s call for Dollar weakness against the Europeans started the day looking quite bright but really failed to fulfill expectations in most cases. I am left being pulled between two opposing poles – does the fact that the Dollar has pushed back higher mean we’re going to see direct follow-through or will this prove to be just a deep correction?

I have just written a full paragraph on the targets if the Dollar pushes higher. However, having just checked the rates I see that the move is close to being over! The Euro support is at 1.2426 and the Swissie still around 1.1825-40 provided by that overhead prior trend support. Cable strangely enough has not really reacted too much and I sense this may indicate a complex correction that could recycle yesterday’s move.

I really can’t see much argument for levels beyond those quoted. Well, not today anyway, but the Euro would seem to have room to later retest the 1.2328 low but I’m hesitant to call for any lower. Therefore, today will probably be a bit like yesterday in seeing a correction to the early move this morning.

Dollar-Yen hasn’t really been affect by the Dollar’s gains against the Europeans. This annoyed me a little with the depth of the recovery. Now we have a question mark over whether it pushes up to 99.05-30 before the larger correction or whether this correction resumes directly. I prefer the latter but this seems more like a day to watch for breaks and work with them.

The Yen crosses recovered as expected yesterday but I can’t say I’m too impressed with the manner they managed to carve out these gains. I still keep one eye over my shoulder here since I’m expecting Dollar-Yen to suffer a deeper correction. At the same time I mentioned that the correction to this morning’s Dollar gains against the Europeans should be fairly shallow and this is tending to point more and more at a collapse in the Yen crosses.

Indeed, yesterday’s gains didn’t seem to have the mark of a confident rally and I’m beginning to think that we’re in a large sideways triangle here and this implies losses… below the lows we have seen thus far would open the bearish doors for more losses… Only back above yesterday’s highs bring relief…

Today’s free analysis is for USDCAD and can be found on
http://www.fx-forecaster.com/DailyForecast.html together with yesterday’s trade set ups.

Good luck.
Ian Copsey

Tuesday, March 3, 2009

It looks like we'll see the Dollar losing out against the Europeans today...

There was pretty much a mixed bag yesterday. There were a few good calls with Cable collapsing, the Swissie bouncing yet again from the overhead (rising) trend resistance, the rally in Dollar-Canada and the dip to just below 135.75 GBPJPY. For the rest the day the others held a mostly to a frustrating sideways consolidation that failed to inspire.

We remain with a strange balance between the Euro and Swissie where we still have this overhead resistance in the Swissie that refuses to break above the prior trend support while the Euro looks bearish but really disappointed in seeing very little on the downside yesterday. I had been getting a little more bearish for the Euro but the hourly chart is now sporting a bullish divergence and in conjunction with the refusal by the Swissie to break higher, the short term evidence is edging towards a pullback lower in the Dollar and who knows, maybe a larger one.

Even Cable seems to be supporting this view too. It made its decline down to 1.3937-54 (and may edge down to the lower level today) but here too I’m expecting a correction higher from this area that should eventually reach the 1.4200-50 area at least. Interestingly, if we include the Aussie, while this could see a little dip today we do appear to be getting to the point of requiring a correction higher. Dollar-Canada is close to seeing a pullback lower also – now very close to its channel low.

Now, the next confusion that we need to watch out for is Dollar-Yen and the Yen crosses.

I remain bearish for Dollar-Yen for a move down to around 94.20 … maybe a few points above. However, both EURJPY and GBPJPY have made their retracement targets and ideally should begin rallying again. Now, if the anticipated losses in Dollar-Yen are matched with Dollar losses against the Europeans then we either see a trading range or if the Dollar’s losses against the Europeans becomes much stronger, then maybe we can see the Yen crosses manage a rally.

I do feel there is some risk here that the supports I had been looking at in the Yen crosses may well break… If so we have seen the end of their rallies and we’ll move back into a larger daily consolidation. Indeed, unless Dollar-Yen resumes its rally earlier than expected it is very difficult to conjure up a bullish scenario in GBPJPY while I am so bearish in Cable…Thus be aware of this risk as it could generate persistent losses…

Today’s free analysis is for AUDUSD and can be found on
http://www.fx-forecaster.com/DailyForecast.html along with the trade set ups for yesterday’s highlighted levels in The Daily Forecaster.

Good luck.
Ian Copsey


Monday, March 2, 2009

The Dollar looks firm against the Europeans, weak against the Yen

The call for Dollar-Yen and the Yen crosses to lose out on Friday was correct with Euro-Yen in particular bouncing from just 10 pips above the 121.98 target. However, there are some troublesome conflicts here. Dollar-Yen still has further to go down I feel and this can still be quite a significant drop – the target here being around 94.20. Now this does look like making the Yen crosses weak. While this could be fine in GBPJPY there doesn’t appear to be much leeway after the 122.08 EURJPY low seen…

This may be fine if we can anticipate EURUSD rallying but this has started the day on the weak side with only a limited bounce from 1.2512-53 expected… However, given that I feel the long term is more bearish for the Yen crosses I’d tend to accept lower levels from here if this is forced by a lower Dollar-Yen. Thus take care with these today.

Dollar-Europe developed partly as expected and partly now on Friday. In particular the recovery in GBPUSD was much deeper than expected but I’m still convinced that the downside is vulnerable here and therefore this is where the greater risk lies.

Where we do have to tread with care is in the differing perceptions of the Euro and Swissie. The Swissie bounced nicely from the prior support line for a third time on Friday and this line is now closer to 1.1800. Thus I can accept a weaker Euro but I’m not sure this is going to push too strongly below 1.2512 today. Having said that I do see support around 1.2426-58 today which is the most I would expect at this point. However, this sort of breach of the 1.2512 low would highlight losses all the way back to the 1.2328 low – but not necessarily in a straight line.

We then have to see how the Swissie reacts around the trend line once again. Only a clear break above 1.1800 is going to threaten upward acceleration…

Elsewhere Dollar-Canada looks pretty firm and expected to push to around 1.2856 at least while the Aussie is pushing lower though I feel the 0.6247-88 area should see a pullback develop but the overall outlook would then look bearish…

Today’s free analysis is for GBPUSD and can be seen on
http://www.fx-forecaster.com/DailyForecast.html along with Friday’s trade set ups…

Have a profitable week.

Ian Copsey