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HARMONIC ELLIOTT WAVE

Friday, May 29, 2009

Take care today - strongest signals are bullish for the JPY crosses

Needless to say that yesterday’s price action was not what I had in mind… The erratic nature of the correction from the Dollar lows has been some of the most difficult I have seen in quite a while and provided a great deal of conflict between different related currency pairs.

While EURUSD remained below the 1.6049 high USDCHF dipped once again to marginal new lows. GBPUSD also failed to make as much downward headway than I had been looking for and USDJPY was much stronger than I had wanted. At least I had highlighted the fact that the recovery from 93.84 had been strange which could well mean a stronger move higher.

It really does cloud the picture for today and given the level of volatility we are going to have to be extremely cautious once again today. If I have any common view it is still for Dollar strength but I have had to rein in the corrective levels considerably. I still have 1.3722 EURUSD, now 1.0970-00 USDCHF and 1.5754-77 GBPUSD which I feel could still be seen – but we’re going to have to watch how price develops during the first half of the day. I would really want yesterday’s Dollar corrective lows broken… or if they are by only a few pips.

It is worth noting that the limited corrections being seen now could well mean that EURUSD could reach the 1.4717 high again… Indeed, the fact that we are still in a medium term Dollar decline but which should end over the next 5-7 days should not be forgotten so don’t fight against any firm losses.

I perhaps look more at the JPY crosses for ideas. I had a good look at these this morning and I do feel there is further to go on the upside, a little more today (after the correction deepens a bit more) and then again next week. However, there does seem to be a reasonably strong argument to say that next week’s highs are going to be pretty significant ones and this will mean a big correction lower.

Considering I’m looking for the Dollar to find a low against the Europeans there is no certainty of what is going to drive the JPY crosses lower – that is USDJPY or USD-Europe… It may well be both…

So for today, I feel that we should take a cautious stance and only jump on any move if clear trade set ups develop. I feel next week should prove to be much clearer.

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.

Have a great weekend
Ian Copsey

Thursday, May 28, 2009

The Dollar's corrective rally should again continue today

The basic expectation of a higher Dollar developed but the degree or volatility was much higher than expected. Never-the-less, the move is much in line with the type of correction I feel should occur at this stage and with the added confirmation of GBPUSD reaching 1.6085 and reversing lower I feel the basic bullish Dollar-currency pattern is now correlated. Thus we can expect further gains today and while I feel the level of volatility should reduce I do not foresee this being a particularly smooth process.

Given the 1.6084 high in GBPUSD it actually seems to confirm a much larger correction. Keep this in mind as I feel even the very least we should see is 1.5425 and I can’t rule out even lower. This does therefore have capacity to be a very strongly directional move and as long as we get the entry levels right the profit potential does seem higher here.

I feel that over today we could see EURUSD down to around 1.3720, GBPUSD down to 1.5777 and USDCHF up to 1.0970-00. Note that the USDCHF correction could be the most difficult as the correction could be compressed somewhat…

Equally, after what was a very puzzling day in USDJPY it has broken higher this morning. The complexity of the recovery so far makes it difficult to identify intermediate resistance levels but I suspect the 96.30-40 area could be about right. I’d expect a correction from there but this entire rally still has 96.69-00 in its sights – at the most 97.14. While this resistance holds the entire picture remains very bearish and with long term cycles moving lower I still see quite a substantial move lower over the coming months. Only a break above 97.14 and 98.00 would really cause some serious doubts in my mind…

Overall, I feel that USDJPY has the greater influence on the JPY crosses but near term the picture looks a bit clouded with the general Dollar picture correlated which could see the crosses behaving quite erratically in narrow ranges. I do feel a top will be seen here too before long…

AUDUSD also provided a tidy topping pattern and this also correlates with the general bullish US$ picture. The minimum target for this decline is at 0.7665-70 but I have a feeling this could eventually find its way down to 0.7590-00 before the last leg to a new high. I have also adjusted my view on USDCAD given the dip yesterday and then recovery. I’ll keep with a bullish US$ picture for now with a tentative target around 1.1455.

Today’s free analysis is for GBPJPY and can be seen at
http://www.fx-forecaster.com/DailyForecast.html along with yesterday’s trade set ups that provided a pool of 155 pips profit.

Good luck.
Ian Copsey

Wednesday, May 27, 2009

I still favor the bullish Dollar correction continuing

Yesterday started going well with the Dollar gaining against the Europeans as anticipated. I hadn’t really expected that the corrective rally would be particularly direct – indeed, a more erratic rally would seem to be more likely. The pullback after those initial gains was really very, very deep.

Has it broken the Dollar bullish scenario? Against the Euro and Swiss Franc – not (yet?). However, we have already seen GBPUSD push higher this morning and does seem to be headed for the 1.6085-93 area. The question remains whether EURUSD and USDCHF will follow. To be honest, as things stand right now I could still argue a Dollar bullish case and if I have any preference due to my eventual targets this is what I would like to see. It will require the Pound to rally while leaving the other two static and this will be the testing period…

Does it make any difference to the underlying Dollar bearish stance? Not at all. However, what it does risk changing are the targets. If EURUSD rallies directly from here, there will be a greater argument for the 1.4717 peak to be challenged although at this point I wouldn’t expect any (or at least not significant) breach. In USDCHF the 1.0370 low will be definite and maybe a little below.

So the first half of the day is going to be the testing time between the - larger correction then Dollar decline - versus - the direct decline.

USDJPY somehow managed to remain all day between the trigger levels of 94.40 & 95.25 I set. However, this morning has finally seen this break and it should continue moving higher. The next intermediate stalling point should be around 96.39 and later to the 96.69-00 resistance. This should complete the complex correction from 94.54 and then the next move should still be lower.

The JPY crosses likewise remained range bound yesterday but have broken higher along with USDJPY which was always likely to provide the trigger. For the moment they should follow USDJPY higher and the rest will depend on the movements in GBPUSD and EURUSD…

AUDUSD dipped lower then reversed to new highs but unless 0.7900 breaks I still favor a second correction lower. USDCAD was much like the rest of the pack – it rallied and then reversed to new lows. Support here at 1.1120-40 seems key here.

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

I shall be presenting a seminar in Hong Kong on Saturday 27th June at the Excelsior Hotel in Causeway Bay. Please see
http://www.earlthorn.com/ for details.

Good luck.
Ian Copsey

Tuesday, May 26, 2009

There seems to be a greater argument for a bullish Dollar correction

I have to admit to not quite knowing how Friday would develop. The long weekend in the States could have – and did – provide a psychological barrier to activity and thus while I could see marginal new Dollar lows I was also eyeing the potential for a larger correction.

Well, having got through the weekend and yesterday’s lethargic trading I still have the same view but there are one or two small complications. My target in EURUSD was around 1.4073 and yesterday it managed to reach 1.4050. This is where there is a slight ambiguity. I feel that in terms of the development of this rally it has probably done enough to satisfy the wave structure required to complete the move. However, on the other hand it hasn’t quite met 1.4073 and I can say the momentum picture looks exceptionally heavy…

While I have described EURUSD this type of conflict occurs across most of the Dollar currency pairs…

So, we’re going to have to be a little cautious as the day starts but overall I feel a pullback is due – and this could be quite deep as explained on Friday. I do not think the medium term downtrend is complete yet and I do see this as a correction but in many ways, assuming I am right, it will provide a more healthy MT momentum condition that should have the potential to set up Dollar bullish divergences on the next push lower…

This does also seem to be the risk with USDJPY. It still hasn’t managed to break below the 93.72 level, break of which would confirm additional losses to 91.70. Until it does I cannot rule out a recycling of the recent correction back to the 96.69-00 area… A move above 95.25-50 would confirm.

The JPY crosses look mixed too. We have had bearish divergences but they don’t seem that strong and thus I am wondering of these can see a little higher, although I can’t see them being that strong with the indications elsewhere suggesting a period of Dollar corrective strength.

To complete the entire picture even AUDUSD and USDCAD appear to be in the same boat – needing a pullback…

The only caveat I should apply – which seems weak but is relevant – is that long weekends can throw out some strange development so watch for the break levels quoted in the individual analyses in today’s report.

Today’s free analysis is for USDCAD 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, May 22, 2009

There seems to be a pattern of possible new lows but then a bigger pullback

With the States being on Memorial Day holiday on Monday the next update will be for Tuesday’s trading


I knew yesterday was not going to be an easy one. Price development had begun to deviate from the past I had expected and there were conflicting indications from several areas. What actually occurred yesterday has, I believe, assisted in some extent in identifying a perhaps better structure to follow though conflicts do still occur between the European currencies in particular.

Never-the-less, the trade set up levels highlighted in yesterday’s Daily Forecaster report were kept busy and provided 7 potential trades of which 6 should have been profitable and providing up to 300 pips of potential profit…

Today we have the run into the long weekend in the States and the potential does seem more for mostly corrective price action though in some currencies there are still risks of minor follow-through first. Certainly, in terms of the larger picture I feel a pullback is probably needed after the sharp weakness seen in the Dollar so best take care with bearish views today.

If there is any chance for a slightly stronger follow-through today I feel it will come from USDJPY although I have to say the short term wave structure has become quite complicated. As long as we can get below 93.70-85 there does seem to be a good argument for follow-through to 93.36 at least and possibly as far as 92.90 – but then we should see a pullback. This does still seem en route for 91.70 and the only risk is that failure to get below 93.70 does still keep the recycling back to 96.69-00 possible. I do feel though this is unlikely.

The impact on the JPY crosses is probably for further consolidation but with a downward bias. The one that has me more confused is GBPJPY which has been dragging itself higher and here I feel the performance of GBPUSD is more the driving force so keep both base pairs in mind…

AUDUSD also has a short term barrier around 0.7819-37 and USDCAD at 1.1302-25 so the picture across all currency pairs does seem to be uniform.

Today’s free analysis is for AUDUSD and can be found on
http://www.fx-forecaster.com/DailyForecast.html along with yesterday’s trade set ups which provided a pot of 305 pips profit of which we could take advantage.

Have a great long weekend.
Ian Copsey

Thursday, May 21, 2009

There is a great deal of uncertainty but remember the medium direction is bearish

The well laid plan for the next stage of the Dollar’s decline came to a screaming halt yesterday as the market decided it didn’t have the patience. It rushed through 1.3720 EURUSD with only the briefest of corrections with GBPUSD having declined the chance to consolidate also resuming its rather dramatic rise to reach 1.5793… However, USDCHF appeared less attracted to the downside and while it did dip marginally below 1.0977 the reaction has been less marked.

It leaves me very much in two minds. A rally from 1.3422 EURUSD in a final wave could only reach 1.4060 maximum although USDCHF does have potential to reach 1.0683. The stalling areas at 1.3829 EURUSD, 1.0968 USCHF and 1.5792-04 GBPUSD all have alternative options as either part of a possible complex correction or in the case of GBPUSD it did reach a valid target. So the chance of a pullback cannot be discounted. However, I can’t really say the momentum picture is really indicating any reversal…

Today will therefore have to be a guarded one, watching intermediate support/resistance that hopefully could point the way of the next move. Hopefully, after we’ve seen the next move it will help provide an indication of its intentions…

USDJPY didn’t get back above 96.69 and spent most of the day declining, finally breaking the 94.54 low this morning. Does this mean it can carry through to 91.70 directly? Well, it is definitely an option with the only barriers along the way being 94.03 and 93.72. Either of these levels would have the capacity to cause a second correction higher. If I feel there is any stronger indication then it is a directly bearish move which on a break of 93.72 would probably stall around 93.36. It would produce a correction only and once complete would begin to nose dive down to 91.70. We really need it to push back above the 95.15-20 area to highlight a second recovery higher.

If there’s any clue it does seem to come from what appears to be a softness in the JPY crosses. The question is whether the Europeans will drive the move or USDJPY… or even perhaps both.

AUDUSD rallied but does seem to require a brief pullback before the next leg higher. USDCAD pushed below 1.1474-58 but we need it to break below 1.1345-61 to maintain the downward momentum.

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 that provided up to 125 pips profit.

Good luck.
Ian Copsey

Wednesday, May 20, 2009

Mixed signals today but overall expect range trading

The basic direction of the majors was identified – with the exception of the soar away Pound – but otherwise the picture at the moment looks comfortably close to expectations. However, there does seem to be need for some minor adjustments with some targets met while others were not and this is going to require some flexibility.

Just taking a step back, we are looking at a downtrend in the Dollar against EURUSD and USDCHF with the current corrections likely to be part of a complex correction. While yesterday saw a successful identification of the 1.3665 area as a potential top for EURUSD, the decline in USDCHF failed to reach the 1.1018-45 target. I have stated that we MUST see a triangle in EURUSD otherwise the 1.4280-00 target will be too deep for a normal retracement. Given that USDCHF still needs to push a little lower we must also consider the possibility that the triangle in EURUSD may well turn out to be an ascending one – and this implies a retest around the 1.3720 peak… This will be my focus today but expect the Dollar to recover following those tests to keep in a range.

Just to cover GBPUSD in comments on the Europeans – the rally through 1.5352 & then 1.5474 implies a move to 1.5650-70. A correction today is quite possible but probably no further than 1.5350. In the meantime watch resistance at 1.5523-39.

Now, I was rather disappointed that USDJPY didn’t reach 96.98-97.14… The peak at 96.69 was one of the resistance levels I marked the basis for this then broke down with the move down to 95.89. It does leave me slightly stuck in the middle of alternatives. Basically I am very bearish here and that should be the dominant theme. However, I felt that possibly we should have a slightly longer correction. It is possible that we could see a move back to the 94.54 low and then a second attempt higher to reach closer to 97.14. If anything, this is my favored view. However, the other two possibilities to look out for are an earlier push back to 97.14 before lower – or that we just see the Dollar fall away on its way to the next target at 91.70. We shall have to be vigilant and try and spot which scenario will play through. The major points are: 97.14 should not be exceeded or a drop below 94.50 will risk direct losses.

The JPY crosses were slightly stronger than expected and almost look as if they should rally. However, the combination of a lower USDJPY and range trading Europeans should keep the crosses held into a range. Only if USDJPY drops directly below 94.50 is there more risk of a deeper move lower in the crosses…

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


Good luck.
Ian Copsey

Tuesday, May 19, 2009

We should see limited movements today

Well, there wasn’t any need for the sudden thought that maybe USDJPY would just keep moving lower… The low at 94.54 was almost bang on target just as the Dollar peaks against the Euro and Swiss Franc. For now this keeps things pretty much on track with my basic medium term views and do seem to suggest that period of sideways consolidation I described yesterday. The only adjustment I feel like making to that is the time frame. I had indicated that this could last until Wednesday but the way things have developed so far we could find this taking most of the week…

Indeed, this may just spill over into USDJPY also. It has seen quite a direct rally which should find solid resistance in the 96.97-14 area where I look for a cap today and which should send us right back to the 94.54 lows… Given the speed of the recovery I feel it probably hasn’t done enough on a time basis. We’ll review that when we get back lower. Never-the-less always keep in mind that the larger move is lower and once 94.50 breaks the next larger stalling point is not until 91.70.

Needless to say the strength in USDJPY and Dollar weakness elsewhere drove the JPY crosses higher and I’m pretty much in favor of seeing consolidation here also. I guess that’s not a big surprise given the basic view of consolidation elsewhere.

I’ll add a comment on GBPUSD which failed to reach target on the downside and has re-approached the 1.5352 high. If I have any preference here then it is for a flat like correction so I don’t really envisage a break higher at this point (though this is still the medium term view) but a move back to 1.5058 and possibly just a little below. Once this completes I feel it can be pretty strong – and by that I mean around 1.5650…

AUDUSD was stronger than expected too and I feel this is sharing the same fate as elsewhere – consolidation – while USDCAD was much weaker than expected…This has been very confusing as I still eye the 1.1947-87 area as a potential target but it will have to remain above 1.1600 and 1.1550 to provide it with the foundation for another push higher. If not then we have to start thinking about 1.1474 again…

Today’s free analysis is for EURUSD and can be found on
http://www.fx-forecaster.com/DailyForecast.html along with yesterday’s trade set ups that identified up to 385 pips profit.

Good luck.
Ian Copsey

Monday, May 18, 2009

The Dollar should end the day lower against the Europeans

Friday’s move in the Dollar against the Europeans has shaken up the short term view. I have in no way changed the general Dollar bearish view but the breaks of resistance are just not in line with the 1.3891 EURUSD and 1.0912 USDCHF targets. It means that we have seen those lows already, having fallen short against the Swiss Franc but ironically overshot the prior 1.3695 target in EURUSD. That being the case we are now seeing a final correction in the medium term Dollar downtrend before the moves to the targets I have at 1.43 EURUSD and 1.0930-60 USDCHF…

In fact, I feel we have probably seen the deepest extent of those corrections – or very close to them already this morning. Therefore today does look like being a Dollar bearish day but I’m not really in favor of an immediate return to the lows and feel the greater likelihood for the coming 2-3 days is going to be a sideways consolidation. Indeed, in EURUSD it is the only way I can see price reaching the 1.43 target.

Now, USDJPY… On the whole it went pretty well on Friday. The 96.17 high held and we saw solid losses and fairly close to target – but not quite there. We are seeing bullish divergences in both hourly and 4 hour charts and this highlights the fragility of the downside. This does, on the face of things suggest that we’re about to head back to the 96.70-97.20 resistance area…

But wait… It does look pretty decisive but the move down from 96.17 has not been quite as I had expected – certainly the pullback from the first low at 94.72 was exceptionally deep. Still, I could argue a bullish case but when I went through the JPY crosses I didn’t find quite so much correlation… these do seem to have the potential to extend losses.

Now, unless I’m totally wrong on the Dollar-Europe side of things, lower JPY crosses will therefore have to be fuelled by a weaker USDJPY… Thus, today I feel we’re going to need to watch the key support areas and just how the JPY crosses develop. If we get any move in USDJPY below 94.28-48 I will begin to get concerned and below 94.03 would raise considerably the risk of direct follow-through lower to 92.91… Thus, take care…

Elsewhere, the Dollar strength seen on Friday has provided a stronger environment for USDCAD to reach closer to its minimum retracements at 1.1947-87. There are signs of a slowing in the rally so take care and given the recovery has been pretty choppy so far there is every reason to feel it will remain like this. AUDUSD has also been given the opportunity to reach 0.7412-35 – but this could be the full extent of the losses…

Today’s free analysis is for USDJPY and can be found on
http://www.fx-forecaster.com/DailyForecast.html along with Friday’s trade set ups that provided opportunities for up to 227 pips profit…

Have a profitable week.
Ian Copsey

Friday, May 15, 2009

Look for more Dollar losses today

It many ways it was a good day yesterday – it was just the apparent slow motion that annoyed me. However, the fact that the Dollar resistances in EURUSD and USDCHF that held well in spite of what appeared to be a great deal of reluctance to sell Dollars was a positive. On top of that the marginal new lows in AUDUSD and GBPUSD (even if they weren’t as low as I’d looked for) was also a plus.

So it looks like the Dollar downtrend is finally resuming but clearly the bearish appetite is not quite so strong as before – but this may not be a bad thing. The only thing that continues to provide me with nagging concerns is the still distant 1.3891 target in EURUSD and the much closer target in USDCHF at 1.0912… One of them has to break down. If I have any choice it’ll be USDCHF which may just edge a bit lower to 1.0840. However, this is probably not a question that will be answered today as the moves to target are unlikely to be direct and therefore these are more likely to be seen early next week…

Equally, I feel GBPUSD has probably found its low and that should match the general Dollar weakness with a move back to the 1.5352 high. AUDUSD can be pulled into this group too and while I have a minor concern over the shallow depth of the pullback lower, yesterday’s recovery does seem set to push it back up to the 0.7710-38 area…

And USDJPY… well, that was a disappointment yesterday… It went nowhere … and very slowly at that. We are finely balanced between two scenarios and I still have direct bearish preference but the 96.17 high seen this morning really does need to cap… As long as I’m right we still have one more dip to the 93.65-94.03 area but then a pullback.

I’ve had several comments pointing out the large head & shoulders on the daily market. To be honest I don’t use these in my analysis – though I acknowledge them and use these patterns in set ups. I should warn that while the neckline is around 96.65 pullbacks in these patterns quite often penetrate the neckline. Indeed, if we do get a break above 96.17, I see the pullback target closer to 97.03-43…

Overall, as you probably all know I am bearish, very bearish… because of the monthly cycles that are exerting their influence right now – just as they did in 1995 – in fact the same group of cycles is now repeating that pressure. What we do have to do is navigate the move down and this should next (after the expected pullback) reach 91.70 and later close to the 87.10 low – but then another correction higher… So there’s still lots of fun to be had yet!

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 which provided up to 205 pips profit…

Have a great weekend.
Ian Copsey

Thursday, May 14, 2009

In spite of the deeper pullback I still look for Dollar losses to resume today

I was caught flat footed yesterday with the strength of the Dollar. Well, it wasn’t by too much and on review I can’t say it will change the underlying medium term Dollar bearish view. Indeed, I feel this pullback can probably be considered quite healthy and enables the ultimate targets to still be achieved quite comfortably. Even the trade set ups provided a solid performance yesterday so this does at least provide me with some consolation having got the main daily analysis skewed.

So, the pullback levels we saw today in EURUSD and USDCHF look like holding. I do have question marks against GBPUSD and AUDUSD but overall the underlying picture remains unchanged. By tomorrow I feel we will be challenging the 1.3891 target in EURUSD and 1.0912 USDCHF – and possibly a small overshoot towards 1.0840.

As mentioned, while there is a remaining risk that GBPUSD & AUDUSD will see the correction deepen just a little further I feel we’ll be challenging this week’s highs once again by tomorrow.

USDJPY has continued its slide and has broken the 95.61 low which didn’t come as too much of a surprise. Here too the direction remains lower and I feel that we’ll probably see this stall around 94.05 and from there a modest correction can be seen before the next leg lower.

However, the fact it has now broken the 95.61 low has generated lower lows and lower highs since the 101.43 high and this brings with it the threat of continued losses. Over time (and this will probably be after a correction from 94.05) the next larger target is way down at 91.70… and even this should only produce a correction for an eventual retest close to the 87.10 low… I should remain that the longer term cycles are heavily bearish and this should limited corrections over the coming 4-5 months.

The only currency that has been more consistently showing US$ strength has been USDCAD. Ideally this should continue to see more gains. However, given that this rally is just a correction always be aware of the medium term downside risk and don’t fight a stronger reversal lower.

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 which made available 300 pips profit…

Good luck.
Ian Copsey

Wednesday, May 13, 2009

We're approaching Dollar supports that should generate a correction

We didn’t see a deeper pullback yesterday in the Europeans but a direct resumption of the Dollar’s downtrend. That was a little frustrating but the medium term picture remains the same and even this morning we are seeing further losses which look like reaching the intermediate targets I have been outlining.

I do just have one slight concern – that the target for EURUSD is at 1.3891 – some 170 pips above the current price – while the target for USDCHF is at 1.0912-25 – just 70 pips away from the current price. So we’re going to have to play this carefully unless my daily targets of 1.43 EURUSD and 1.0623 USDCHF are going to be surpassed directly. There is a closer target for EURUSD at 1.3804 being part of the move to 1.3891 so for the moment this is where I feel we need focus attention first.

Even GBPUSD was looking buoyant yesterday although the follow-through this morning hasn’t been quite so strong. I’m not too concerned about this since I would expect yesterday’s 1.5352 high to stall the first move anyway – but as long as this breaks then the next larger target is at 1.5466 – and this may take just a little while longer. It may well suggest that we’ll see strength in EURUSD to 1.3891 and GBPUSD to 1.5466 later – but it does leave a question mark over USDCHF…

Even USDJPY pushed lower more directly than I had expected and this too is pushing down close to the 95.61 intermediate target. There are some signs from momentum that we may just get a bounce from here but this move has been direct so we’re going to need to use some care here also. There is further support at 95.34. If it gets beyond here then the next major support I can see is not until 93.54-92…

However, note that the JPY crosses, while weak yesterday have started to stall and I feel a correction is due soon. Indeed, maybe we have seen the lows for now but the medium term picture has quickly deteriorated and this is beginning to highlight the potential for my exceptionally bearish outlook for the coming 4 months may well be developing… Note that the cycles here are hard, hard down – as strongly as they were in 1995 when it last reached the 79.70 historic low – and thus corrections may be hard to come by. Still, before getting too bearish let’s just cope with the current decline…

AUDUSD is looking perky again and this should benefit from the Dollar’s weakness with a move to 0.7802 possible today. USDCAD has held above its lows and I fancy that it will survive the current US$ weakness and carry on with its correction for a while. However, the medium term outlook remains bearish.

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

Good luck.
Ian Copsey

Tuesday, May 12, 2009

The Dollar downtrend should resume by the end of today

The pullback came first … and probably it hasn’t quite finished but the move so far has been constructive for the Dollar bearish stance. I still see the initial risk today being Dollar bullish but I have levels around 1.3485-04 EURUSD and 1.1140-78 USDCHF that should cap the correction and allow the underlying losses to continue. Probably we’ll not see new lows today but by tomorrow or Thursday these losses should extend to new lows and by the close of the week we’ll have reached the intermediate (and not final) targets I have been detailing.

The depth of the correction in GBPUSD surprised and I’m in two minds here on whether we see the same sort of pattern as outlined in the other two Europeans. I suspect there will be one more low here today but by end of day we should begin to see the upside following through again…

Now USDJPY provided me with a surprise… I had begun to think about a more conservative structure here but the losses seen yesterday actually don’t seem to be over here as well… I suspect that by the end of the week there is a good chance we may have penetrated the 95.61 low… If this does occur then the larger bearish scenario is still a possibility… There’s a little way to go yet so I’ll take the first stages with care, but do take care of the downside…

The losses also spilled over into the JPY crosses which fell back quite consistently over the day. With EURUSD and GBPUSD due to rally I have a more mixed view here but there does seem to be risk of further losses in the early stages today. I’ll take these step by step and see how USDJPY performs versus the Europeans…

AUDUSD looks close to a low and I’ll be looking for this to begin rallying again while USDCAD did much better than I feared yesterday. I still have a few concerns over whether it can make it to its full corrective potential but today should see this move higher still but it is due a pullback. I feel that while this pullback lower does not reach new lows while the Dollar loses out against the Europeans we may well be seeing a correction that can last quite some while…

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.

Please note that I shall be presenting a seminar on integrating analysis techniques in Hong Kong on the 27th June. Please see
http://www.earlthorn.com/ for details.

Good luck.
Ian Copsey

Monday, May 11, 2009

Dollar losses have developed as expected but we should see a correction soon...

Well, that was a solid end to the week on Friday. The initial uncertainty was there which caused over half the day to see consolidation but the break when it came was in line with the medium term Dollar bearish preference against the European currencies – and this time against the Yen also.

So this week should see further losses and the question therefore has to be whether this will be direct or whether an earlier correction can develop. There are no Dollar bullish divergences to note in the hourly charts but probably some early signs in the 4-hour chart. It would seem more likely therefore that we shall see some initial recovery in the Dollar over the first half of the day but I suspect by the end we shall see the start of the next leg lower…

I have intermediate targets at 1.3891 EURUSD, 1.0912-25 USDCHF and 1.5356 GBPUSD that should be seen following today’s correction.

USDJPY also succumbed to the weight of the Dollar but not by as large a degree as against the Europeans. This lack of downside is tending to push the overall picture in favor of more Dollar gains here but I’m not so sure that we should be getting bullish too quickly. We need a break below 97.79-93 to see any stronger follow-through lower.

Thus, on the assumption that USDJPY doesn’t break below 97.79 we are probably more likely to see the JPY crosses see further gains also. This also may not be direct as the pullback expected in the European currencies should generate the same reaction in the crosses… Clearly, if we are to see any stronger losses we’ll need USDJPY to see s stronger reaction lower… and breach of 97.93 could well trigger follow-through close to the 95.61 low in that case…

AUDUSD pushed higher and we are now approaching resistance at 0.7738 and this should cap for a correction at least. Equally, USDCAD pushed lower to the 1.1495-05 target (and just a few more points) and thus this too should benefit from a corrective rally…

Today’s free analysis is for USDCHF 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

Friday, May 8, 2009

Conflicting signals suggest cautious trading today

Yesterday was quite close to expectations in some respects but also a long way away also… As far as Europe is concerned EURUSD didn’t find a new low as I had anticipated but USDCHF stalled just 4 pips below the resistance I had provided… After hitting the high EURUSD has fallen back – and a bit too deeply to retain a directly bullish stance. However, USDCHF reacted pretty much perfectly.

However, it’s really difficult to be bearish for them both… I have seen it happen but it’s not something that is normal. So which is right?

The other pair to look at to try and confirm the European picture is obviously GBPUSD. Its peak at 1.5196 was not a million miles away from 1.5228 and it did sink over the day down into the 1.4932-72 target support and bounced perfectly from there… In the process it basically decoupled itself from the other two and whether it will remain decoupled or not is really not known right now.

Look at the decline the 5 minute chart failed to provide a bullish divergence and while there was a declining wedge into the end it somehow loses confidence without the divergence… If I look at it another way I could perhaps see this continuing its decline towards 1.4914… maybe 1.4855 but I doubt it. However, it also not impossible for it to enter into a sideways trading range with a high around 1.5136-50… So frankly there’s no particularly strong clue here either…

Thus Dollar-Europe is pretty mixed right now and we’ll need to work with breaks. I do feel that for the first half of the day we are more likely to see consolidation – then watch for breaks later in the day…

USDJPY ended up going higher but failed below the prior 99.74 corrective peak. The 4 hour chart has a bearish divergence but the hourly has not – in the short term anyway. I feel this is up for debate also. If it does get above 99.73 then the 100.75-90 area looks a distinct possibility. Otherwise any dip below 98.20 will make it look a bit shaky…

The JPY crosses therefore made it to new highs but now with solid bearish divergences. It doesn’t rule out another high but equally we should work with breaks.

AUDUSD found a cap and I feel we should see further corrective price action while USDCAD confounded with its recovery. Maybe it can see more but I still have this 1.1500 target planted in my mind…

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

Have a great weekend.
Ian Copsey

Thursday, May 7, 2009

Yesterday was messy and could lead to one more recovery in the Dollar - then lower

The Dollar’s attempt to push higher against all currencies except the Yen failed pretty quickly yesterday and then promptly began a messy sideways move. I had been expecting to come to the conclusion that the medium term downtrend would therefore resume. Well, I can’t rule it out but I can’t say that the short term looks exceptionally mixed right now. In fact, all the way through with perhaps the exception of GBPUSD I felt that the Dollar bearish structure had reached a point that it needs to promptly extend higher else we’ll see another corrective recovery.

It certainly doesn’t change my medium term Dollar bearish view and this still looks to be the main underlying risk as far as I can see. Thus do keep this firmly in mind. However, the complexity of the short term Dollar bearish resumption is of a level that I feel it probably needs one more push higher to clear the cobwebs away and then allow the downtrend to resume…

If I’m right in this then the areas to look for are around 1.3185-1.3210 EURUSD and 1.1425 USDCHF (max 1.1493.) As for GBPUSD… well, this seems to have a mind of its own right now I’d prefer to see the 1.5168 high remain intact and for the correction to recycle back to 1.4932-72…

Equally, the Dollar failed to really push too much lower against the Yen yesterday and we do seem to have come to a status quo right now that needs to clear the boundaries of the 97.93-99.20 range to generate the next larger move. I still have a stubbornness in terms of wanting to see this lower but the short term is sufficiently clouded to make me wait for breaks of these two limits. Overall, I do feel a more decisive move is quite possible once we have shaken off the current indecision. Given that Japan is mostly back from the Golden Week holidays today the status quo of the past week could well begin to clear itself.

With The JPY crosses rebounded strongly too with the Dollar’s opposite correlation between Europe and Japan. These gains must stall soon else the risk will be to break above the recent highs…

I was disappointed with failure for USDCAD to rally and it does seem to suggest that the downside is still dominant and while 1.1710 caps the direct decline scenario does still seem to be probable. 1.15 is my target here. As for AUDUSD… well, this wave structure is as clear as mud right now… I tend to have the same opinion as I do with Dollar-Europe… It’s due to move higher – just the short term is more unclear…

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.

Good luck.
Ian Copsey

Wednesday, May 6, 2009

This morning's Dollar gains should present us with better selling levels...

Yesterday was a moderately successful day with 4 profitable trades – so some pretty good hits on stalling levels. However, all did not go to plan with a stronger than expected Dollar on the eventual pullbacks towards the end of the day. There are two ways to look at this – one that a slightly different Dollar bearish structure has formed and the other suggesting a recycling of an intermediate complex correction.

I do remain Dollar bearish overall – the break above 1.3391 is evidence of this – and I’d prefer to see these losses continue directly. However, we’re very close to the limit of the current correction and if the Dollar strengthens much more then it will spark the alternative recycling of the correction. Even if this is seen the overall Dollar bearish view doesn’t fail…

I have to say that there are some shorter term Dollar bullish divergences so the recycling is a distinct possibility – so we’re going to have to observe key resistance levels which I’ll detail within the individual analyses today.

There does seem to be an interesting development concerning the Yen. USDJPY remained pretty flat yesterday which led to a flat EURJPY but a strong GBPJPY pushed by the firm GBPUSD. However, they’re beginning to edge back lower. USDJPY in particular appear to be potentially developing a bearish continuation pattern that on a break of 98.60 would trigger follow-through lower. I have an interim target around 97.13 which should generate a pullback.

This weakness should drag down the crosses also. However, just as there is a limit at 97.13, equally I don’t think we’re going to see a dramatic decline. Japan is on its last day of Golden Week today (although will remain quiet while many use the holiday to extend into the weekend) and we’ll have to see whether the rapid rally in USDJPY will see a reversal on their return tomorrow…

AUDUSD is equally as poised in the same way as the Europeans but if there’s any stronger clue to the Dollar’s upside potential then it does appear to come from USDCAD which bounced from just above its 1.1668 target yesterday. This structure would appear to imply gains to 1.1920 and 1.1971 at least. I also see a small risk of this reaching 1.2020 before it heads lower again.

Basically, if the Dollar rallies then it will be useful since it should only mean better selling levels tomorrow…

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

Tuesday, May 5, 2009

Early trading could well see a small pullback but I expect Dollar losses to continue

The basic view of seeing the Dollar’s larger downtrend resume was correct yesterday. I can’t say this break happened quite as expected but the break of 1.3391 EURUSD does break the sequence of lower highs in the move down from 1.3737 and therefore opens the door for losses to follow-through over the next 2-3 weeks.

Now, the next question is whether the Dollar can follow-through directly lower or whether we have a correction first… And it’s a good question as well, but the answer is not 100% clear. I suspect that there may be room for a recycling of the correction and thus we need watch & wait to see the initial reaction in the Asia session – or more likely the early European session as we did yesterday.

The problem is that still today and tomorrow Japan remains on its Golden Week break and this is likely to sap any real enthusiasm to make any decisive moves. If there is this initial recycling then the 1.3343-62 EURUSD, 1.1316-36 USDCHF and 1.4920-35 GBPUSD levels are the ones to watch. Overall this week should see some solid losses in an overall Dollar decline which I feel can reach 1.43-1.44 EURUSD, 1.0550-1.0650 USDCHF and in the Pound probably as high as 1.5470.

The calls for highs in USDJPY and the JPY crosses worked quite well. I would have preferred a more decisive reversal and the limited moves we saw must provide a degree of caution in case we can still see one more high, but at this point the emphasis does appear to be for the downside to resume but we do seem to need to take the early stages with care.

The two that have given me a lot of problems recently also seem to be following the same U.S. Dollar bearish route with AUDUSD pushing higher and USDCAD breaking below 1.1750. The latter does seem to be pretty bearish and although there is close support at 1.1668, any break would appear to open up quite a stronger decline to 1.1569 at least and potentially 1.1495-05 over the next few days…

Today’s free analysis is for EURJPY and can be found on
http://www.fx-forecaster.com/DailyForecast.html along with yesterday’s trade set ups. Please note that I am planning two series of the technical trading webinar for NY open and the other for NY close on Friday evenings. Please register interest at http://www.fx-forecaster.com/TechnicalTradingWebinar.html.

Good luck.
Ian Copsey

Monday, May 4, 2009

We still need confirmation but the risk is for Dollar losses to resume

Well, the partial holiday on Friday really restricted trading which by and large brought range trading with the exception of the Yen which weakened further before this week’s 3 day break. Indeed, as we start the week the Japanese holiday subdued trading that we saw on Friday is likely to persist up until Europe returns from its long weekend.

However, it does leave the rather mixed position described on Friday intact. With Europe coming back I suspect there should be a stronger push in one direction and that’s what we’re going to have to look for.

Starting with the Yen what I do see is the deepening of the bearish divergences in both USDJPY and the crosses. Indeed, these divergences have spread from the hourly chart and are now reflected in the 4 hour chart also. Overall, especially in the crosses, I feel the rallies we have seen appear to be more corrective in structure rather than impulsive (that would imply new highs.) I can’t rule out minor new highs 132.62-133.06 EURJPY and 149.00 GBPJPY but there does seem to be a growing threat of a reversal lower.

I have been left a little in the air with USDJPY but if I have any preference it is for a move back lower. The indications here aren’t quite so clear but the 99.57-74 area does look like it should produce a pullback at the very least. Now, whether this decline is sustainable may well depend on how the Dollar develops against the Europeans.

I have been more Dollar bearish and I don’t really want to change this view but do see a mild ambiguity in terms of whether the Dollar’s losses continue directly or whether there’ll be a modest correction. If I have any preferences then it is for direct losses. It would be prudent however to be aware of breaks levels that would confirm which scenario will play through. As I said, I prefer the direct Dollar bearish stance but this does seem to require a move through 1.3385-91 EURUSD, 1.1240-70 USDCHF and 1.4972 GBPUSD followed by the 1.5035-68 area. Failure would provoke Dollar gains.

AUDUSD looks firm and USDCAD soft – although the latter does seem to face good support around 1.1755-74. Unless this breaks the likelihood is for a reversal. As for AUDUSD a break above the 0.7382 high will extend to 0.7437 at least…

Today’s free analysis is for USDCAD and can be found on
http://www.fx-forecaster.com/DailyForecast.html along with Friday’s trade set ups. Please note that I should be providing the technical trading webinar over the next 2-3 weeks at U.S. open. Please see details on http://www.fx-forecaster.com/TechnicalTradingWebinar.html.

Have a profitable week.
Ian Copsey

Friday, May 1, 2009

I find the situation quite balanced and feel we should trade on breaks

Overall I’m not too sure what to make of yesterday. There were some good calls on support/resistance though only a limited number provided any pattern based confirmation while the break above 98.04-16 USDJPY has left me annoyed as I had really expected a more bearish outcome.


The stalling points in the Dollar’s losses are also ambiguous. With EURUSD having stalled just below the 1.3391 peak – break of which would imply a higher high and thus a more bullish structure was not entirely unexpected – indeed I suggested looking for a bearish reversal pattern – but is also represented an alternative which would mean a much larger correction lower.

Looking at USDCHF and GBPUSD I get that same feeling of a larger correction less easy to absorb. In the latter, a deeper decline would probably imply a new low below the 1.4395 area which is something which I don’t really favor.

USDJPY did hold on for some while below 98.00 but finally succumbed as much as suggested this did cause a persistent follow-through. I am now left not wanting to be bullish as it would probably imply that the 14 year major cycle low may have occurred much, much earlier and this would imply quite considerable strength. I am therefore left stranded between bullish and bearish structures and waiting for breaks.

If there is any indication from the JPY crosses then momentum does seem stretched on the upside and therefore I will be expecting a reversal back lower before too long. What may decide the positions in Dollar-Europe and USDJPY may well be what drives the JPY crosses lower – will it be a larger rally in the Dollar against the Europeans or will it be general Dollar weakness that would suggest USDJPY may be able to drive the move.

Thus today is one where I want to pause more for review rather than be too vocal in one direction. At present it doesn’t seem the right thing to do – but let’s see which side breaks first…

Today’s free analysis is for AUDUSD and can be found on
http://www.fx-forecaster.com/DailyForecast.html along with yesterday’s trade set ups. April provided an 80% profitable set up ratio with up to 2,450 pips available…

Have a great weekend.
Ian Copsey