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

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