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 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

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