Pages

HARMONIC ELLIOTT WAVE

Tuesday, June 30, 2009

The Dollar bullish stance is under threat but care still needs to be used

The failure for the Dollar to make any significant gains yesterday is beginning to wear down the general expectations I have been holding and does therefore begin to force me into considering alternatives. I remain with the conflict that I see between a break towards the 1.4177-1.4212 area in EURUSD which will almost certainly imply a loss of the 1.0590 low in USDCHF.

Let’s take a step back and consider the larger picture to get an idea of what all this means. I have been looking at a large daily triangle in both EURUSD and USDCHF. The Dollar lows at 1.4338 and 1.0590 were very appropriate for the triangle structure and the daily cycles I have been following also appear to support this with a Dollar cycle low at the end of August. Thus, a rally in the Dollar into the end of next month before the last downward leg in the triangles into end August fit perfectly.

Now, coming back to the current conflict between EURUSD and USDCHF will mean that if we get a break below 1.0590 then the automatic target will be at the 1.0370 low. Consequently this should provide a lift in EURUSD back to the 1.4717 peak (and possibly even as far as 1.49). In many ways, on a daily basis, this is not too much of a shift as it will mean that we will have seen a flat type correction and the Dollar cycle lows can come in slightly early.

It’s still not my favored pattern but if forced into it I’d not argue too much.

Well, have we come to that scenario? Not quite – although it is close. This morning’s high at 1.4117 again could well be counted as a double top and that could argue a move right back down again within the penultimate leg of a sideways triangle in EURUSD. This would allow USDCHF to remain above the 1.0795 low and strike higher again, possibly itself in a corrective structure before a larger break out. Even then we have a barrier in EURUSD between 1.4177-1.4212 to overcome – but this is stretching things a little in USDCHF…

Just to mention USDJPY… a peak at 96.33 or below could still keep this in a sideways consolidation above 95.04. If it does break above 96.33 the outlook is a little more positive at least and maybe considerably so. However, this has been playing games within its own erratic consolidation pattern and therefore significant care still needs to be exercised.

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.

Good luck
Ian Copsey

Monday, June 29, 2009

We should move right back into range again today

Friday didn’t see the decline I had expected and without access to my charts over the weekend I had felt that the implication would be for a rally into the 1.4177-1.4212 area. The problem with that scenario is the position in USDCHF. Very much like the call last week when USDCHF found a low at 1.0631 we face a situation that to be honest I’m not that keen on seeing much lower than the 1.0795 seen on Friday. However, equally having gone over EURUSD I can’t say my favored view is for a new high today…

If anything I feel that the rally to Friday’s 1.4117 high looks more corrective than a trending move. It surprised me to find that, but the wave relationships tend to support this more – and actually fits in with the USDCHF position. Given the highly volatile nature of price action over the past few weeks it is a scenario that can’t be ignored at the very least…

I’d like to fit GBPUSD into this framework as well. Here I am less certain but there is a possibility. We shall have to watch this one a little more closely however as GBPUSD is in a different daily pattern compared to the other two. However, overall if there is any guideline to follow then it is in EURUSD which, if my bearishness today is incorrect again, will imply follow-through to 1.4177-1.4212 as has been the alternative for some while.

The Dollar’s weakness on Friday was also reflected in USDJPY. I almost got bearish here but the structure of the decline from 98.87 doesn’t seem quite right to me. The momentum picture hasn’t really confirmed a reversal higher so we’ll have to be a little careful. However, if anything the JPY crosses look more on the soft side but this could (and should) be driven more by the Europeans rather than USDJPY…

All in all, the scenario I am looking at could keep the Dollar in the recent trading range – but move more towards the highs and this does seem to be a common feature of all Dollar-currency pairs – perhaps with the exception of USDCAD. Here I want to be a little careful but I feel the stronger argument is for a rally. However, best wait for confirmations before committing too quickly.

Anyway, if what I have considered is going to occur then the advice must be to take profit when seen and always remember that there has been no break of the corrective wave structures of yet – so only look for a stronger directional move once break out areas have been taken out.

Today’s free analysis is for USDCHF 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, June 26, 2009

Range trading should persist today

We sort of got what I expected yesterday – just not in the right order… What it does tend to suggest is that the consolidation isn’t over yet and it’s going to take another day or two… or three… or four… So we need to be prepared to bunker down and fight the whippy shrapnel that has been plaguing the market for some while.

The current status quo may mean that we can see a small correction higher in the Dollar today followed by some weakness, but all within the larger picture of an intermediate correction lower that I still feel will translate into Dollar strength once we finally see the break out. This could well still see marginal Dollar highs in USDCHF if the correction following its aggressive rebound from the 1.0631 low. So there’s lots to actually be prepared for.

Having staved of the decisiveness of a break below the 1.6188 low GBPUSD still has various options and one of these could be a high around 1.6840-50. We just need to be aware of what constitutes a break and until then we must assume that the consolidation remains in place.

USDJPY broke above 96.04 and this allowed the upside to extend to 96.56. You know, the route it is taking is quite arduous and doesn’t really fill me with enormous bullishness, but while the corrective low we saw yesterday at 95.66-70 remains intact there is still an argument for a move up to the 97.19 area again… However, it probably will not manage that directly so today does still look like range trading.

The anticipated range trading doesn’t really garner much enthusiasm for the JPY crosses. Here I have been frustrated by the ratcheting higher and I’ve decided to be more open minded. Overall I remain bearish and I do feel that is the main risk, but until the recent series of swing lows is broken (in the hourly chart) there may well be room for continued slow gains.

So, take care still and while these trading conditions persist take profits when seen. Hanging onto a position just doesn’t seem to make sense…

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 (112 pips).

There are only a few more seats available for my seminar on price forecasting in Hong Kong tomorrow at the Excelsior Hotel in Causeway Bay. Please see http://www.earlthorn.com/ for details and to register your attendance.

Have a great weekend
Ian Copsey

Thursday, June 25, 2009

It could be another messy day of range trading

Yesterday proved to be quite interesting. I outlined the conflict I had between the outlook for EURUSD versus USDCHF and how any significant weakness in the Dollar was unlikely. Well, USDCHF bounced perfectly from the support area I provided though I will not in any way claim that I expected a 400+ pip rally… However, it has avoided that conflict completely now.

Perhaps that statement could be read to mean that I still feel that EURUSD was now free to extend its gains into the 1.4177-1.4212 are. Well, it did cross my mind at one point last night. However, the pullback has been so deep I do really find it hard to believe we could see that rally. And that means we have to find an alternative structure that suits both EURUSD and USDCHF.

There doesn’t appear to be an argument against a statement that EURUSD has seen a long period of sideways consolidation and very whippy price action. This is beginning to look like an irregular triangle to me. This would imply that we could still see it lower but then back in a correction before the eventual move lower. Equally USDCHF is rather mixed and probably still in a state of shock with the size of the rally. However, it is due a pullback – the question being whether this will be direct or after a minor new high. Thus the combination of the pullback in both EURUSD and USDCHF over the next day or so should provide the end of the consolidation and for the MT Dollar rally to resume.

USDJPY is now a little mixed. I feel the JPY crosses have a small pullback higher to be seen but after that the risk turns lower again. Now whether this will be driven out of a strong Dollar-Europe or another decline in USDJPY (or both) is all up for grabs. However, if I have any preference then it is bearish USDJPY after a pullback.

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 (195 pips).

There are only a few more seats available for my seminar on price forecasting in Hong Kong on Saturday 27th June at the Excelsior Hotel in Causeway Bay. Please see http://www.earlthorn.com/ for details and to register your attendance.

Good luck
Ian Copsey

Wednesday, June 24, 2009

Today requires care ... but I have doubts that the Dollar can extend its weakness much more

Clearly the direct bullish Dollar view has been squashed after yesterday’s reaction. What is has done is complicate the entire picture and it has been a struggle to put together some (correlated) scenarios that could work.

At this point in time I feel the Dollar’s weakness against the European currencies is purely corrective. Just stepping back, if we are to expect a stronger rally in EURUSD then USDCHF must break below 1.0590. If USDCHF does break below 1.0590 it must get closer to the 1.0370 low to complete a full retracement. If it stalls anywhere above there then is limits the subsequent upside – and that is something I find very difficult to imagine given the cyclic structure.

If USDCHF gets to 1.0370 then EURUSD must move strongly higher above 1.4177-1.4212 and if that occurs, then it has only one month to decline 1,500 pips to the 1.2750-1.2850 target. That’s a tough thing to believe… Thus, I have to say that while the wave structure is exceptionally complicated, at this point this is just a correction and while it could last until the end of the week I find it difficult to expect EURUSD to get above the 1.4177-1.4212 area while USDCHF shouldn’t move below the 1.0619 level.

How this leaves GBPUSD is also very unclear… It almost looks as if it could reach a new high… Early trading should see a pullback but while it remains above 1.6365-70 I feel there is significant risk for follow-through further towards 1.6560-97 followed by a pullback. This may well imply a marginal new high once the correction is complete.

As for USDJPY – well I feel this is more a function of the JPY crosses. These have seen some sturdy corrections but I still feel the wave structure really implies new lows. Therefore I’m not really in favor of strong gains in USDJPY and the first resistance is around 95.88-96.07. While this holds the picture remains bearish.

So, while yesterday was a bit of a mess the trade set ups I post on
http://www.fx-forecaster.com/DailyForecast.html actually provided quite a number of profitable trades. I do feel the mess can continue a little while longer but during this time I feel a little more caution is advised as the corrective price action has not yet come to a conclusion.

There are only a few more seats available for my seminar on price forecasting in Hong Kong on Saturday 27th June at the Excelsior Hotel in Causeway Bay. Please see http://www.earlthorn.com/ for details and to register your attendance.

Good luck
Ian Copsey

Tuesday, June 23, 2009

JPY crosses should lead the Dollar higher against Europe and lower against the Yen

 


Overall the underlying expectations of further Dollar gains proved correct though in the majors, given the move was already underway, it was tough to provide accurate levels to be able to jump in on the anticipated trend. I have to say the move was much slower than anticipated and does therefore just give rise to come caution but I still see further gains ahead – at least against the European currencies.

 

I really want to be bullish for the entire week but there is an alternative target that may shorten the life of this particular move higher and keep it in a sideways consolidation. Still, this means the upside should follow-through today again and thus we face the same issue of trying to catch the right levels to jump back in again… Overall I see minimum potential for 1.3559-81 EURUSD, 1.1003 and probably 1.1069 USDCHF and against the Pound towards 1.5934-89 at least. If we are to expect any further direct follow-through then I feel these levels are the crucial pivotal area.

 

Although the Dollar was firm against the European currencies it succumbed against a strong Yen and while yesterday didn’t break key support at 98.32 it has been tested this morning. Given the breakdown of the JPY crosses and the fact that their targets are still some way lower I don’t really count on seeing 95.32 USDJPY hold for too long. This probably has an initial target at around 94.44-66 before a more significant correction but overall this now seems to have a target at 93.84 once again.

 

AUDUSD should find temporary support around 0.7826 although this too has a much lower target over time and USDCAD surged through my lower resistance points and does seem like confirming a follow-through to 1.1630-38 at least – but ahead of that watch the 1.1155-76 area.

 

So the emphasis for today is basically Dollar strength with the exception of the Yen where it looks to make further lows. Thus the best return should come from the JPY crosses which should leverage from the constituent currency moves.

 

Today’s free analysis is for GBPJPY and can be seen on http://www.fx-forecaster.com/DailyForecast.html along with yesterday’s trade set ups (270 pips).

 

There are only a few more seats available for my seminar on price forecasting in Hong Kong on Saturday 27th June at the Excelsior Hotel in Causeway Bay. Please see http://www.earlthorn.com/ for details and to register your attendance.

 

Good luck

Ian Copsey

JPY crosses should lead the Dollar higher against Europe and lower against the Yen

Overall the underlying expectations of further Dollar gains proved correct though in the majors, given the move was already underway, it was tough to provide accurate levels to be able to jump in on the anticipated trend. I have to say the move was much slower than anticipated and does therefore just give rise to come caution but I still see further gains ahead – at least against the European currencies.

I really want to be bullish for the entire week but there is an alternative target that may shorten the life of this particular move higher and keep it in a sideways consolidation. Still, this means the upside should follow-through today again and thus we face the same issue of trying to catch the right levels to jump back in again… Overall I see minimum potential for 1.3559-81 EURUSD, 1.1003 and probably 1.1069 USDCHF and against the Pound towards 1.5934-89 at least. If we are to expect any further direct follow-through then I feel these levels are the crucial pivotal area.

Although the Dollar was firm against the European currencies it succumbed against a strong Yen and while yesterday didn’t break key support at 98.32 it has been tested this morning. Given the breakdown of the JPY crosses and the fact that their targets are still some way lower I don’t really count on seeing 95.32 USDJPY hold for too long. This probably has an initial target at around 94.44-66 before a more significant correction but overall this now seems to have a target at 93.84 once again.

AUDUSD should find temporary support around 0.7826 although this too has a much lower target over time and USDCAD surged through my lower resistance points and does seem like confirming a follow-through to 1.1630-38 at least – but ahead of that watch the 1.1155-76 area.

So the emphasis for today is basically Dollar strength with the exception of the Yen where it looks to make further lows. Thus the best return should come from the JPY crosses which should leverage from the constituent currency moves.

Today’s free analysis is for GBPJPY and can be seen on
http://www.fx-forecaster.com/DailyForecast.html along with yesterday’s trade set ups (270 pips).

There are only a few more seats available for my seminar on price forecasting in Hong Kong on Saturday 27th June at the Excelsior Hotel in Causeway Bay. Please see
http://www.earlthorn.com/ for details and to register your attendance.

Good luck
Ian Copsey

Monday, June 22, 2009

In spite of the small spike lower on Friday the Dollar uptrend should now resume

Well, Friday didn’t produce what I expected… It was all very frustrating with the whip down to marginal new Dollar lows against the Euro and Pound (although in GBPUSD that had been expected) and to end the day quite close to those lows. However, having had a good look at the structure I can’t really change my long term view of a bullish Dollar and indeed I just feel this was an unfortunate case of missing the final low.

This picture seems universal and therefore today does look to be a Dollar bullish day and tentatively I’ll expect this to make it back towards the recent highs over the course of the day. The only risk to this, as far as I can see, is that we see a sideways consolidation develop. I’m not really keen on this latter scenario since the correction we have seen doesn’t appear to be of a structure that would imply a more complex consolidation.

The Dollar bullish case hasn’t quite been confirmed in USDJPY but I feel this should begin to climb too as long at the 95.51-87 area supports. I still feel this has one more attempt at a new high in the larger correction before it succumbs to further weakness. I’ve been cautiously been expecting a test as high as 99.64 before this turns lower but the progress is slow so I’m not sure we should be expecting a rapid resolution of this target. Confirmation of a more sustainable move higher will come on a break above 96.88 & 97.17…

The implication for the JPY crosses from the combination of the individual currency pairs appears bearish. Assuming that USDJPY rallies it does therefore imply the risk of a sharper move in the Dollar against the Europeans and AUDUSD. Keep this in mind as the day progresses. Only if USDJPY falls below 95.51 would I then look for more direct losses.

AUDUSD has started the day on a negative note and USDCAD on a positive note – so in line with the general bullish Dollar preference. I suspect even after a pullback these should be the dominant directional influences.

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 (150 pips.)

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

Have a profitable week.
Ian Copsey

Friday, June 19, 2009

Early trading could see some pullbacks but the Dollar should end the day higher

After all yesterday wasn’t quite as complicated as feared and in may way behaved close to expectations. I do feel that the structure is beginning to emerge from behind the clouds and thus the Dollar should be heading higher today.

Early trading does look like seeing a small extension of the gains seen already but following this into European and possibly even NY trading the risk then seems to be much higher for the Dollar.

More than anything I think the immediate focus should be on navigating the first stage of all this. First of all GBPUSD looks bullish and this may have the strongest impact running into Europe. The implication does seem to be for a move direct higher to 1.6507-24 again but only go with this if the 1.6397 high breaks. If it holds then the downside is going to break through quickly.

Indeed, this type of modest initial trading followed by what appears to be the risk of a stronger impulsive move is common across the board. The near term Dollar resistance barriers are around 1.3810-20 EURUSD, 1.0910-20 USDCHF and well, GBPUSD should have already found its corrective low. If it moves below 1.6282 then the upside game is over and the downside will begin to add pressure. Indeed, when all those resistance barriers give way the extension could be quite sharp…

USDJPT spent another day of gentle movement and seems to have found its low. Here the resistance is at 96.77 and I feel a pullback is required before that can break. I don’t think the Dollar gains, when they come, will be quite so strong as in the European currencies. Overall the first move in this sequence should eventually challenge the 98.56-87 area – whether it gets there today is a different question – probably not quite.

We have to match what I have described above with the expectations in the JPY crosses. These do appear to have room for a quick push higher to around the old corrective highs at 135.36 EURJPY, 160.38 GBPJPY and 78.37 AUDJPY. However, take care with these as they all have the same pattern that ideally make marginal new gains – but the crosses can tend to fall short. However, these too also suggest that once the correction higher is complete the next move will be lower – and this is why I suspect that Dollar-Europe will outperform Dollar-Yen.

Take care – could be a whippy day but the signals are there for a good move later today.

Today’s free analysis is for EURJPY and can be read 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.

Have a great weekend.
Ian Copsey

Thursday, June 18, 2009

Range trading likely again today

Well, I looked over my shoulder at the right time. The solid bullish wave structure diffused yesterday and while I still retain that medium term bullish expectation the way things went yesterday open up several different possibilities in terms of a corrective pattern before the uptrend can resume. It would be right to ask whether this can resume directly and of course the answer is that it is one of the possible permutations at this time – but it’s not one I favor right now.

In many ways I am very comfortable with the development due to the time issue. I don’t expect a Dollar high until towards the end of next month and a direct rally from here would have implied a really complex correction over the next 2-3 weeks – which is possible but highly unlikely.

So we have a correction now and it may well take a day or two to play through and certainly through to the weekend. The next problem is choosing from the several possibilities facing us. I’ll approach this problem first from the JPY crosses. These have become very messy but we should be used to that. The biggest signal yesterday was in AUDJPY which bounced just about perfectly (bar one pip) from a support level that indicated a complex correction is developing there. Similar structures were evident in the other two also. I therefore look for this group to see gains today.

Next… will it be USDJPY that drives it up, or weakness in Dollar-Europe? Actually, there could be a combination of the two here if I’m to be honest. I can actually see EURUSD scrambling a little higher, USDCHF a little lower before coming back into range. USDJPY does show tentative signs of being bullish today also but quite how far is a little uncertain.

Needless to say, from this description it is going to be a day where we should either just avoid trading until the patterns clear up or if we really want to dabble, then be very careful. Take profits when seen for if this is a complicated correction as I suspect the wave structure could be very choppy & erratic. If anything, favor the JPY crosses on the upside and let the others sort themselves out.

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.

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

Wednesday, June 17, 2009

The underlying risk remains Dollar bullish but there are signs of possible consolidation

Another good day… it’s nice to have a run of good calls but then I have to look over my shoulder as too often the wave structure begins to get more complex. Indeed, there is risk of this occurring and I somehow get the impression today may not all go my way.

First of all, the basic analysis still maintains a medium term Dollar rally through to around the end of next month. This should never be forgotten since the underlying risk is for the Dollar to make gains and when it does then the move can still be swift. In fact, there is nothing really to say that it won’t continue to rally but I feel the wave structure is beginning to look a little less direct.

I should also add that I don’t think we’ll see yesterday’s corrective lows broken but more that there is a modest risk of seeing a sideways consolidation develop. The clue will be in today’s attempt higher. If it fails above 1.3774-87 EURUSD or below 1.0924 USDCHF then this will raise the odds in favor of a quiet range trading day. Otherwise breaks of these levels would appear more likely to cause a resumption of the uptrend.

USDJPY has a modestly strong down day and held nicely at 96.00-10. However, this morning has seen it edge below 96.00 but until the 95.35-71 area breaks I feel the upside hold the key to the next move. In general I feel USDJPY will gain along with the Dollar-Europe gains but probably at a slower pace. I find I hard to get too bullish as it really doesn’t look like breaking away from the recent trading range. Overall a move to 99.64 is possible but don’t discount the chance we’ll see continued volatility.

The JPY crosses are very unclear. Today I really find the wave relationships hard to identify and I feel we need take a lot of care. The individual components of the crosses should be watched to see what will be the driving force. I do somehow feel we have probably seen the highs in the crosses and it’s more a matter of how soon the move lower can resume…

AUDUSD looks bearish and USDCAD bullish today but again I can’t see excessive moves and this is another reason behind my entire view that today could turn out to be a bit messy.

Today’s free analysis is for GBPUSD and can be found on
http://www.fx-forecaster.com/DailyForecast.html along with yesterday’s 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, June 16, 2009

We should see a small correction today before the Dollar uptrend continues

Oh well… right… The Dollar does really want to rally strongly… Yesterday went pretty much to plan overall in terms of seeing persistent gains over the day and in some areas stalled around the areas I was expecting but the thrust below 1.3805 EURUSD was more than I had expected at this stage. Keeping in my mind the 1.2750-1.2850 target in the 4-6 week time frame I had thought this to be bearish enough for now.

However, there are signs all round that this rally could well follow-through directly… by this I mean that if we see certain resistances break then we could be talking the 1.3613 EURUSD, 1.1095 USDCHF and 1.6006 GBPUSD by the end of this week and by the end of next week even higher (for the Dollar).

However, I don’t think we’ll see much more today. There is risk of a marginal new high in the first half of the day – could well occur in Asian time – but then we will be due a pullback. We’ll have to be a bit flexible on buying into that pullback since this the limit of this correction will be dependent on where the current high actually completes.

So, apart from the earlier part of the day, the main direction should be lower today for the Dollar but I don’t think this will be a particularly direct or strong move. More likely it will be choppy so watch your entry levels and stops.

Looking over at USDJPY this came off over yesterday and as I’ve been writing this outlook it has dipped further. I’m not sure we should turn our heads and become strongly bearish. It should mean extension lower but there is no escaping that it has been a very erratic pair of late and I can still see a scenario where this will continue. The break level to switch to more strongly bearish is at around 96.13 still.

Even the JPY crosses all fell off yesterday and it seems as if they’ve found a top slightly earlier than anticipated. Indeed, that does look like a trend that will develop but with the expectations of a correction in Dollar-Europe and the fall in USDJPY the risk is that we’ll see a pullback soon. In the medium to long term I do feel the direction is lower but if the 96.13 USDJPY support holds it can still move to a new corrective high above 98.87. The downward drive in the crosses is more likely to come from the weakness in the European currencies. If USDJPY drops below 96.00 then this could well imply significant acceleration lower for the crosses… Best if this balance is kept in mind.

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.

Good luck.
Ian Copsey

Monday, June 15, 2009

Expect the Dollar to continue its rally over the day

Right, we’re back on the bullish track and that should continue today and I doubt we’ll get much of a pullback. Targets for this rally are going to be around the first highs – so 1.3805 EURUSD and 1.0985 USDCHF although I wonder whether this may just be exceeded. The Pound I am less definite on – definitely losses here but there is some risk of a pullback from around 1.6230 so watch that first.

All in all we have around 4-6 weeks of Dollar strength and so we’re going to have to pace ourselves. I have a feeling that this may well mean that following the retest of the Dollar highs we may well see a period of consolidation but we’ll come to that later…

USDJPY has broken higher and therefore the 98.87 high should be achieved but the pace of the structure appears slow and I don’t want to get too carried away at this stage. However, the 98.00-10 support area appears to be the one to watch and from there a move to new highs.

If anything the JPY crosses look very slightly on the firm side which tends to work with USDJPY – but the problem will be the requirement for the Dollar not to weaken against the Europeans. It’s tough to know how this will break but possibly a short period of consolidation before the crosses can rally – possibly on the back of a correction in the Europeans. However, take care as this type of scenario could cause some choppy trading.

Indeed, USDCAD also looks as if it could get caught in a shorter tem consolidation – and only a break above 1.1257-89 is going to extend the upside more directly. While I prefer the consolidation scenario do remember that the main direction is now higher.

AUDUSD does look more bearish still…

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

Have a profitable week.
Ian Copsey

Friday, June 12, 2009

A bit later than expected - but the Dollar should rally today

I’m not really surprised with yesterday’s moves. The scenario of another whip back lower in the Dollar was definitely one to be watched and this came to fruition. It has also relieved the conflict between the deep pullback in EURUSD while those in GBPUSD and USDCHF had been comparatively shallow. These new lows generate a base corrective platform in which the Dollar can now safely rally with more correlation between the Europeans.

If there was anything that surprised me then it was the depth and aggression of the rally in GBPUSD – almost to the 1.6662 high. It’s so close however, that there is little room for any further gains here without registering a new high… I’m basically not in favor of this occurring because of the 1.5801 low which I feel broke a key low at 1.5852… However, I do have to add that the general area of that low was quite messy and open to interpretation.

So tentatively I feel we have probably seen the full extent of the Dollar’s pullback now – just a little later than expected but that is not too much of an issue. Clearly there has been no confirmation of a reversal to renew the medium term uptrend but that is the focus for the start of the day but technically there is quite a long way to rally back to yesterday’s corrective highs to provide that confirmation. Thus, while I feel we shall make gains it may well be that we don’t actually achieve that confirmation today.

USDJPY was as feared, ratcheting back higher to a marginal new high only to see reversal lower. I suspect we’re in a sideways consolidation and as I have mentioned before the risk in USDJPY when this happens is the tendency to see swing lows/highs broken but then reversal. Best still take care here.

The JPY crosses are mixed and could easily break in either direction but if the Dollar rallies against the Europeans it may make the same attempt against the Yen. These are still quite risky currency pairs and best watch the basic constituent currency pairs for direction.

My apologies but due to further technical problems I am unable to update the website. I should be able to resume updates of the free analysis and trade set ups next week.

Have a great weekend
Ian Copsey

Thursday, June 11, 2009

There is some short term uncertainty but the underlying uptrend should resume today

Well, pretty much everything went according to plan yesterday. There was a wealth of profitable set ups from very close to the Dollar support levels indicated yesterday. On seeing the Dollar bounce I had thought the analysis would be straight forward today… but I have to say the whole picture was very strange… When I say that, I still mean in the very short term picture – the medium-long term into the end of next month remains the same. The Dollar has reversed its losses and should move higher overall.

Really, what I am talking about here is more whether we’ll see a sideways correction – or even a minor new corrective low before the Dollar finally rallies. One such anomaly was that EURUSD retraced 66.7% of the recovery while in USDCHF we didn’t quite make 50% while GBPUSD managed on 35%...

When talking about the EURUSD and USDCHF what we do have to keep in mind is that we are seeing (I believe) a daily triangle and these are structures that provide some rather nasty, erratic moves. Also given the time from for the moves to 1.1750-1.2850 EURUSD and 1.1650-1.1750 USDCHF there is a high probability that we shall see some rather messy consolidation from time to time. GBPUSD is somewhat different as this is not in a triangle and we are most likely correcting the rally from 1.3501.

So to try and bring this to a focus on today, I think we’re going to have to be very careful. I still can’t rule out a marginal new Dollar low in whip back lower before the uptrend resumes – especially so in GBPUSD. We must also allow for the chance that we may even see a triangle form in this correction rather than the straight correction I had been anticipating. I will try and pinpoint the right areas which would imply each scenario.

USDJPY bounced nicely from 97.10. It almost looks as if it has confirmed follow-through higher but it is wavering after reaching the 98.43 level. There is quite a bullish scenario tied up with the 97.10 area but… we really need to see price here remain above 98.00-10. if it doesn’t then again here we may just fall back into the range as has been the pattern over the past 2 weeks. Take care here as well in that case.

The JPY crosses look mixed. I still look back at the bearish Key Day Reversals, but I can’t say we’ve had any firm confirmation of losses – and indeed in GBPJPY we have seen a higher high already. Given the overall uncertain picture generated from the core currencies these crosses should be handled with kid gloves also.

Today’s analysis is for USDJPY and can be found on
http://www.fx-forecaster.com/DailyForecast.html along with yesterday’s trade set ups which saw 7 trade set ups of which 6 were profitable and the last is still in progress…

Good luck.
Ian Copsey

Wednesday, June 10, 2009

The Dollar uptrend should resume by the end of the day

The analysis for me yesterday provided very mixed and conflicting indications. In the end, on the whole, the break levels tended to provide a fairly accurate guide to the fact that we would see our first correction in this move higher for the Dollar.

Given the extent of the first rally and the 5-7 weeks we have for it to reach its next peak (1.1650-1.1750 USDCHF and 1.2750-1.2850 EURUSD) it does suggest potential for some choppy and rather erratic structures over that period. We should therefore take care at all times. However, if I have read this first correction correctly then I don’t think we’re going to see any painful range trading and false breaks of key support & resistance.

The next issue is trying to identify exactly where this correction will stall. Well, unfortunately the decline so far has been a little hard to tie own. If I have any favored stalling areas then it will either be 1.0722-41 or 1.0664-83 USDCHF and either at 1.4160-1.4212 or 1.4237-62 EURUSD. I certainly feel there will be another low beyond what we have seen already but the combinations of potential patterns make this a tough job… However, once it is complete (and should be by late today) then we can expect the next leg higher for the Dollar.

I should hasten to add that in the larger picture for the rest of the year we should not see any loss below 1.0590 USDCHF and above 1.4338 EURUSD.

As for USDJPY, yesterday’s pullback lower has hardly been dynamic and I sense that here too we should find a corrective low for another push higher. The most likely stalling area is around 96.80-97.10 but I cannot rule out as deep as 96.40-66 also. Once we start on the way back higher then I feel we could see 99.64-74 again.

If I am right on both Europeans and USDJPY it tends to imply some continuing range trading for the JPY crosses. In the medium term I am bearish and again the view that the Europeans are going to lose out while later USDJPY should also see losses does tend to suggest an eventual crash. The problem is timing…

AUDUSD and USDCAD are in the same boat as the Europeans – probability of a slightly deeper pullback before the U.S. Dollar begins to show some more strength.

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, June 9, 2009

The Dollar is balanced although I'm not really in favor of strong gains today

I almost got my way yesterday in terms of seeing the Dollar follow-through higher and then to see a pullback but the rally extended further than I had anticipated. Before doing the analysis I thought I’d be talking about seeing the correction back lower today. Well, in general the hourly charts are seeing Dollar bearish divergences but the pullback as been shallow so far and in some cases my RSI is already over sold and this could easily mean we’re going to see new highs again today.

However, I do think we need take it cautiously as in some cases a Dollar follow-through today would stretch the limits of what would normally be expected on the first move higher. I feel it will come down to either a pullback lower today or we shall see another 1-3 days of rally in which we see quite a strong follow-through. Given the time frame for the final high around the end of next month I feel this may be too early. And this then returns me to the idea that we are more likely to see the Dollar drift lower again…

When it comes down to this type of decision the market has to make it should make for a make or break support/resistance area at which we should see a solid move and we have to observe these levels to identify a trade set up – preferably with price patterns. I’ll attempt to describe these in each of the individual analyses today.

USDJPY spent the day in the doldrums – a relatively tight 63 pip range all day long – that certainly didn’t reach either my buy or sell levels. Again, like the Europeans it’s poised and if I have any preference then it is still higher while the 97.91-98.19 area supports. I still see resistance in the 99.12-48 area – even 99.64. While a break of 97.91 would open up a drop through to 96.80 at least and maybe even down to 96.02.

I should add that I feel a lot of care needs to be used with handling USDJPY as it seems to be risking having one of those whippy periods that fail to see follow-through wherever it goes. Pretty much as I’d outlined a few days ago I’d really prefer to sit back and watch to see what structures develop.

The JPY crosses however do seem to have a bullish bias but which side – USDJPY or EURUSD – will drive this next move? If USDJPY remains range bound it would therefore suggest potential for the Dollar to fall off today. Keep watching the Europeans to see what impact they’ll have on these crosses…

AUDUSD still looks slightly bearish and USDCAD slightly bullish but towards the end of the current moves.

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.

Good luck.
Ian Copsey

Monday, June 8, 2009

There is risk of minor new highs for the Dollar but I suspect a correction later in the day

Overall we got very close to what I had been expecting on Friday, a quiet first half of the day which then turned into solid Dollar gains by the end. We should see a little more as well today but the move does seem close to exhaustion now and once this first move higher is completed the risk will be for a day or two of corrective price action.

The sort of target areas I’m looking for are 1.3895 EURUSD, 1.0937 USDCHF and around 1.5888 GBPUSD at least. The target in GBPUSD is a little less clear and we may just need to handle this with some care. There is another, deeper target at 1.5825-32 and only break of this would imply a much deeper move to 1.5699 though I have to say I’m not really in favor of this scenario.

Once these targets are seen I can begin to work out some rough stalling areas for the correction. The problem will be trying to anticipate how long the correction will take and what pattern this will take.

The bigger surprise for me was the break higher for USDJPY. I did voice my concern on Friday that the downward structure was beginning to look a bit shaky and the burst above the 97.23 high provided quite a solid follow-through. In the larger picture this does tend to soften my larger bearish view. There is even a small chance it could totally reverse it and therefore I feel the next week or so is going to be critical.

Ideally, I’d like to see 99.12-48 cap this rally. If not, then there will be risk of follow-through to 100.33-42 and this should then be critical. If it stalls there we could see a larger sideways consolidation develop. If not… well… the risk would seem strongly higher.

I have to admit I don’t really like the directly bullish scenario above 100.42 as the implication would seem to be that the 87.10 low was the end of the multi-year bearish cycle with the resulting scenario becoming quite bullish – maybe even closer to 110.65 again… However, I feel the JPY crosses don’t look that happy and while I find the top difficult to identify I feel these may well be the driver.

AUDUSD & USDCAD pretty much reflect the over Dollar-Europe position.

Today's free analysis is for USDCAD and can be found on
http://www.fx-forecaster.com/DailyForecast.html which already shows Friday’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.

Have a profitable week.
Ian Copsey

Friday, June 5, 2009

There appears risk for Dollar losses early in the day but then another rally

The Dollar attempted to return to its bearish trend but failed miserably and given the time for the cycle high has probably passed it is another indicator in the list that suggests we are about to go through around 2 months of Dollar strength. That should get us down to around 1.2750-1.2850 EURUSD and up to 1.1650-1.1750 USDCHF. Quite where it will stall in GBPUSD is less clear but I’ll begin with a 1.45-1.50 target area…

Of course, while the general targets can be a relatively simpler forecast – just as I had several months ago identified 1.4280 EURUSD and 1.0623 USDCHF the bigger problem I face is deciphering just how it will get there… It is compounded by the fact that the patterns in both appear to be daily triangles which are notoriously erratic – pure corrective price action. However, the broad 2 month time frame should serve as one guideline as we progress.

For today I feel that if we get to 1.4250-70 EURUSD and down to 1.0625-35 USDCHF these should be good buying areas for the next leg higher with approximate targets in EURUSD at 1.3900-25 and in USDCHF – hmmm, not quite so easy to identify but I suspect the 1.0854-91 area. As for GBPUSD the natural target to go for is the 1.5852 corrective low – but it may stall anywhere between 1.5852 & 1.5900.

While all these moves are happening in Dollar-Europe the reaction in USDJPY has been very limited. It seems to have entered one of those phases when it drifts, breaks highs/lows and then reverses. Until we get some stronger indication from this pair I suggest it should probably be left alone. Probably the movement we’ll see involving JPY is more likely to be in the crosses but even here I find the picture less than clear and hence it’ll probably be better to stick the simple Dollar-Europe trades.

AUDUSD looks similar to the Europeans – a small recovery in the first half of the day followed by losses while USDCAD is the opposite – a small dip and then a rally by the end of the day.

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…

Have a great weekend.
Ian Copsey

Thursday, June 4, 2009

It certainly looks as if the cycle low is in - but we do need more confirmation

I haven’t enjoyed this week… I have been looking at this week as the end of the Dollar downtrend and I have to say the attempt to identify it to within a reasonable variance has defeated me. The early potential this week was incorrect and when I thought that meant we should see it higher… yesterday came along…

Having said that I still have to ask the question whether yesterday was the top or have we just seen a correction? Price structure has developed into one of those fairly common instances where the market pushes enough to suggest that a reversal has occurred … but not quite enough to confirm it. Usually the market shies away from these break levels on the first test.

So are we left hanging on to indecision? In many ways yes but there is another way to look at this. On the assumption that the timing is right (and this does have support of Dollar bullish divergences) it means we have only today and tomorrow for a new low to be seen. Given that the targets in EURUSD and USDCHF would then be closer to 1.4717 and 1.0370 respectively it does mean we have to see solid losses today otherwise we’ll run out of time…

While I am frustrated with the situation the whole reason I had selected the 1.43 and 1.0623 areas for the final targets is because of the weekly cycles which have a final Dollar low (from where we should see another large rally) around early September. From the point of view of structure this does tend to suggest we are in some type of daily triangle. If not then the Dollar should move much further than 1.4717 and 1.0370…

So, let’s see how strong the correction is today as that will be a clue as to what to expect next.

USDJPY has remained in its consolidation and frankly the really bearish view I had does seem to be losing credibility. However, in the same long term time frame the Dollar does have a cycle low around the same time – September and possibly running into October. I am beginning to feel that we may only see a move to the old 79.70 low.

That will change the structure of the run down into this area. I’ll need to spend a little more time on identifying just how this may develop, but for now we are in a tight trading range and while it may just continue today we have to start looking for breaks to push the range outwards.

Today’s free analysis is for GBPUSD and can be found on
http://www.fx-forecaster.com/DailyForecast.html along with the past few days trade set ups… Please forgive the look of the website… I need to fix it after the problems I have had with my PC…

Good luck.
Ian Copsey

Wednesday, June 3, 2009

Yesterday's new lows confirm lower lows - but an end by Friday

Well, the idea that the Dollar may have found its low was quickly decided… and so it seems the downtrend should continue. However, it is worth mentioning that the 4-hour charts are now developing Dollar bullish divergences to match those of the daily and 8-hour too. These can of course become extended but we should now have in the back of our minds that a reversal can develop at any time.

The obvious targets are now at 1.4717 EURUSD, 1.0370 USDCHF and in GBPUSD possibly as high as1.6849-63. Let just say these are the next focus. What does strike me is that we are seeing a pretty one way move right now with very shallow corrections so the alternative that occasionally develops is a runaway spike bottom.

Today doesn’t seem to suggest anything but the same. It does seem as if the hours up to European open could see the Dollar drifting higher but probably stalling around the last corrective (Dollar) highs at 1.4240-60 EURUSD, 1.0661-68 USDCHF and 1.6500-05 GBPUSD. Look for losses to continue from there.

USDJPY lost out as suggested yesterday and I’d expect there to be extension to 94.67-95 at the very least. Reaction here will decide whether we’ll move back into the sideways consolidation or we’ll see the next drop below 93.84…

I suspect it may well dip further since the JPY crosses do seem to need to recycle their corrections lower and on the assumption that the European currencies appreciate it would imply that the Yen needs out perform the Europeans…

Elsewhere AUDUSD is in the same boat – still minor dips to be seen before the next leg higher towards 0.8297-13 while USDCAD seems to fit into this plan too… 1.0863-83 should be enough for the next downward leg…

I’m still struggling to get access to the website back… and I hope this will happen by Friday.

Good luck.
Ian Copsey

Tuesday, June 2, 2009

We may have seen the Dollar low last night - but wait for confirmation

Overall I was moderately happy with yesterday’s analysis. The Dollar performed pretty well in EURUSD and USDCHF, the latter providing a low only 6 pips below target. However, the strength in GBPUSD was much, much more than anticipated and I fancy there could be a little more to go…

Now, the big question in EURUSD and USDCHF is whether we have seen the high… I wouldn’t rule it out as both targets I gave were reflecting measurements that would provide an end to the final decline… So I’d like to say that it’s over, done and thus the Dollar will reverse. Certainly there are Dollar bullish divergences in hourly, 8 hour and daily charts so supporting evidence is around. However, it is much too early to say that the end has been seen…

I do feel that today will be a Dollar bullish day and we’ll have to see just where this ends… I suspect it will cause a deep pullback lower at the very least and just how it rallies is going to be important. Given that the last Dollar swing highs at 1.3792 EURUSD and 1.0953 USDCHF are critical being the last swings which, if broken would break the sequence of lower Dollar highs. However, I don’t think this will be seen quite yet and I wouldn’t be surprised to see a deep correction also. Indeed, with a new high expected in GBPUSD this does seem to imply risk of a deeper push lower.

USDJPY was weak early in the day but the reversal higher was sharp. I sense this is in a triangle pattern between 94.67 and 97.00 so this could swing strongly. Take care in that case.

The JPY crosses were all bullish as well yesterday and probably require a pullback today also but the main risk does still appear to be higher…

AUDUSD was stronger than expected while USDCADF was weaker. These two are providing me with a headache since the wave structures don’t seem to add up. However, both still need to see their extremes pushed again last in the week.

My apologies but due to a technical problem which I hope will be resolved by late this week I am unable to update my website with the free analysis and trade sets ups… It will be back soon…

Good luck.
Ian Copsey