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HARMONIC ELLIOTT WAVE

Friday, July 31, 2009

There are a few conflicting indicators today so take care

PLEASE NOTE THAT THE DAILY FORECASTER WILL BE BACK ON 10TH AUGUST


I sat for a moment to try and gather some thoughts about yesterday’s moves to try and find a common thread that would provide insight as to what is going on. To be honest not a lot came to mind…

Let’s start with USDJPY since that was closer to expectations. I was basically bullish yesterday but the early pullback didn’t materialize and instead price moved sideways before breaking higher. It dragged the JPY crosses along with it which was in line with what I had been cautiously looking for. Momentum still looks positive and therefore the 96.15 target now looks the most likely point of reversal – and be aware that this should be a major peak so the next target will be back close to 91.74... Indeed, the JPY crosses look a bit jaded and seem close to their peaks too. Thus, I’ll stick with this and only above 96.20-51 USDJPY would cause me to be totally wrong.

Now, the Europeans… Well, while I was not totally happy about the actual levels in the EURUSD range I can accept what happened – but GBPUSD back at 1.6525 and USDCHF remaining doggedly firm was something which I find hard to absorb into logical structural development.

However, while EURUSD finds the 1.4100-10 resistance too strong it does tend to work with a bearish structure and as such I feel we should see the Dollar stronger over the day and into early next week. I am looking for a retest of the 1.3747 low early next week but feel that general area will hold and allow a reversal higher.

This will imply a much stronger USDCHF – something I still find difficult to really accept but yesterday’s lack of downside will does demonstrate the strength in the Dollar right now. I can see resistance at 1.1067 and even as high as 1.1166. This will require some care as it progresses and it will be worthwhile using EURUSD as the marker. That brings GBPUSD. This almost looks as if it is setting itself up for a flat correction – so a return to 1.6284-1.6310 – then the subsequent rally should move to new highs…

So as my last update for a week may I thank you for your patience during this period. It has been a busy year so far and I’m certainly in need a of a good break and I hope to come back more refreshed.

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 (228 pips).

Have a profitable week.
Ian Copsey

Thursday, July 30, 2009

It looks like a range trading day today

The conflict I see in EURUSD and USDCHF still remains. Without a doubt we have seen the overall reversal that I had been looking for (but from 1.4338) so I’ll stick with a Dollar bullish view and try to see how the conflict can be resolved. It does look as if at some point we’re going to need EURUSD to play catch-up and I can take a guess at how this may be reflected in the wave structure for USDCHF.

As long as I’m right on what I see in EURUSD I’d say this has the clear view and thus I’ll stick with this for now and wait for some reaction in USDCHF. However, I feel that the Dollar will probably not show the degree of strength seen yesterday and for the most part today could be more corrective in nature. That doesn’t preclude marginal Dollar highs – quite the contrary I feel it will – but I can’t see this being aggressive at this point. That could keep GBPUSD in a range also.

USDJPY behaved pretty close to expectations but this is due a pullback as well today. We’ll have to see how far this will retrace but overall I have my eyes on the 96.15-51 area as the final target from where another round of losses can be seen.

AUDUSD still has more losses to go and USDCAD some more gains once the current sideways consolidation is completed.

That just leaves the JPY crosses which almost look as if they could try the upside today but with USDJPY expected to be soft – and EURUSD consolidating but with a marginal low – it looks as if the crosses will follow-their lead.

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 (285 pips).

Good luck.
Ian Copsey

Wednesday, July 29, 2009

We'll need confirmation but I feel the risk is still Dollar (vs Europe) bearish

Just as I had thought things would clear themselves up … they didn’t… Still there is this awkward lack of correlation between EURUSD and USDCHF. While the former made a marginal new high at 1.4303 the latter could just not move below 1.0653. The automatic assumption is that perhaps EURUSD has topped out in spite of the impasse between the two but when the rally in USDCHF stalled just 6 pips above a valid resistance in the bearish structure I have to stop and wonder whether EURUSD has just seen a complex correction and should now resume the rally…

If I just zip over to the JPY crosses the feeling I get here, possibly with the exception of AUDJPY, is that we have merely seen a deep correction and the upside is still very much intact. It appears to be the strongest argument and thus it could be a supporting factor for EURUSD to rally back higher again.

But what of USDJPY? This too failed to see the anticipated follow-through higher and this too may well be argued to have seen its own complex correction… The signal here will be a rally back above the 94.70 high seen thus far from yesterday’s low. If this is the case then the target becomes the 96.15-51 area… Certainly, if my targets for EURJPY and GBPJPY are correct then it would support all three currencies…

Having described all that, the size of yesterday’s moves does make me slightly cautious and thus I’ll be looking for confirmations today for everything. Given the conflict between EURUSD and USDCHF it does edge me in favor of Dollar weakness in the Europeans and strength in USDJPY – but let’s wait for breaks that make this a stronger argument.

Even AUDUSD made a sudden rally higher yesterday. I still think it’s part of a larger rally but here I feel we are more likely to see a ragged correction lower and hence my reluctance to see AUDJPY rallying as strongly as the other two. I feel it may be worthwhile merely observing AUD today as this can tend to get pretty erratic & whippy at these times.

USDCAD bounced perfectly from the 1.0750 support and I feel that’s the end of this one. It could still be choppy in the short term but I’d look for an underlying recovery now.

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 (145 pips).

Good luck.
Ian Copsey

Tuesday, July 28, 2009

Yesterday leaves things hanging in the balance

I had really thought that by now I could point in one direction and feel confident about it. EURUSD did make a new high… just … and this could be seen as having done enough to confirm a high is in place. However, USDCHF did not make a new low and that causes me significant discomfort. If we have seen the Dollar low, then USDCHF is already half way to its target when EURUSD has only just started. I guess it may be possible but it does generate metal gymnastics and basically I tend to shy away from such complex non-correlations firstly because these situations rarely ever play through and secondly because they make my head hurt…

So we’re almost back to where we started yesterday… Are we going to see one more low in the Dollar versus EUR and CHF or have se seen the end of this move? I’ll continue to side with the new low but remember to keep an eye out over my shoulder to watch for any other unstoppable traffic. The break levels are not that far away now so keep an eye on these.

This adds the problem of GBPUSD which peaked nicely in the 1.6515-42 sell zone I offered yesterday but promptly refused to push lower. This needs to break below the 1.6437 low to confirm additional losses but until that point there is still risk of sideways consolidation and possibly even another attempt higher. The 1.6542 corrective high still looks important and we should still observe the 1.6585 high. Only above would cause a stronger push higher.

USDJPY pushed up higher and while 94.80-88 supports I still feel we’ll move up towards 96.04-26. However, that should be it and the next larger move should be lower. That produces its own impact on the JPY crosses which I’d feel more comfortable in seeing a final rally. This is quite possible while the USDJPY target lies at 96.04-26 but a firmer EURUSD would contribute to the effort. However, once these moves are complete the implication is for more losses…

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 (70 pips).

Good luck.
Ian Copsey

Monday, July 27, 2009

I still feel the Dollar should reach old lows against the Euro and Swiss Franc

Although Friday saw some Dollar strength that in EURUSD broke the prior 1.4155 low and carried GBPUSD with it, we have yet to see USDCHF force its way back below the 1.0622-30 lows yet. It leaves things on a knife edge to be honest.

I am very aware that we should be seeing a significant low in the Dollar around about this time. I can see a reason to suggest this is already in place in GBPUSD, although even that is not yet cast in stone. I had considered that maybe the high in EURUSD at 1.6290 may well represent the same and thus the Dollar would rally from here. However, the biggest problem with this viewpoint is trying to correlate the larger picture.

In EURUSD I have been targeting a reversal that should decline 600 points back to the 1.3747 low. IN GBPUSD a high at 1.6585 (which I am beginning to feel may well hold) would imply losses of some 500 points to 1.6078. However, such a similar scenario in USDCHF, well currently we’re at 1.0725 and that leaves on 300 points to reach the 1.1021 high but we’ve already seen a lot of complex movement to get to the 1.0770 high.

Thus I am still edging towards EURUSD reaching 1.4338 still and USDCHF to 1.0590 at least – maybe even 1.0527… That could leave GBPUSD still consolidating below 1.6585 – I doubt we could see a rally of 350 points from current levels.

USDJPY failed to live up to the sudden rush of blood to my head that we could be seeing a more bullish structure. Well, it has only dipped a little further than expected but being in one of its purple patches where most moves turn into horrendous complex corrective patterns we still have to watch this with great care. I still can’t totally rule out an extension of gains above 95.28 to 96.15-51 but equally the 65.28 high was from quite a significant resistance. If anything, at the very least, I feel we need a rally above 95.02 even in a bearish structure so the 95.02-28 area is going to be interesting and clearly crucial to the next larger move. However, overall, once this upward correction is complete then we should see fairly consistent losses to below 91.74…

Certainly, if I got any overall impression from the JPY crosses then it was bullish and I feel could do with a push from USDJPY to above 95.28 to be able to extend to the sort of targets I feel should act as a major high.

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 (143 pips).

Have a profitable week.
Ian Copsey

Friday, July 24, 2009

The risk is still for the Dollar to find new lows against the Europeans

Nothing seemed to be straight forward yesterday and even some of the respective moves in the European currencies also tended towards non-correlation. All I can say is even though I failed to catch many of the moves yesterday the manner of all this does represent the current position of the wave structure which, as I have mentioned before, is a correction within a correction.

However, we are nearing the end of this phase. I don’t think we’re quite there yet and thus I do still expect the Dollar to weaken again, probably by end of day and may last into Monday to see the corrective Dollar lows in place. For the record, and we’re going to have to be flexible on this, the 1.4338 area is the favored high in EURUSD, 1.6743 in GBPUSD while USDCHF has a choice of 1.0590 and I tend towards 1.0527 or maybe even 1.0488. I suspect the first moves today may well deepen the current correction before we see the final losses begin.

On the other side of the world USDJPY saw a very solid rally. Frankly the rally from 91.74 actually has the look of it being much stronger. I do find this hard to accept in some ways and I remain cautious but looking at the 5 minute charts there does seem to be risk of this extending quite a bit further still. 96.15-30 is one possible stalling point while anything stronger would suggest 96.85… As I said, I am not 100% comfortable with this and see the key support area around 91.70-80. Much below would calm me down and suggest a return into the recent range…

However, I seem to have found the same bullishness in the JPY crosses. Momentum is a little shaky and thus, as with USDJPY, we’re going to have to remain cautious. But if the supports I’ll place in the respective analyses remain intact the implication is higher…

AUDUSD still has more to go on the upside although much like the Europeans I feel a minor low lower in early trading is more likely before it can move higher again. USDCAD defies any attempt at a decent correction and seems to be heading for the 1.0783 low and probably a small overshoot to 1.0730-50…

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 (34 pips).

Have a great weekend.
Ian Copsey

Thursday, July 23, 2009

I still want to look for Dollar gains against the Europeans but we need watch for breaks to confirm

Yesterday was a rather strange day I found. Not a lot went right and sifting through the evidence has brought a preference for today but very clearly the overall picture remains mixed. The biggest limitation to the Dollar’s upside against the Euro and Swiss Franc was actually GBPUSD… The Pound reached its goal at 1.6326 and just below and this clearly forced the limited the Dollar’s strength against the other two.

Now, the decision to be made is whether now the Dollar can weaken to the ultimate targets directly or will we still see a deeper correction in EURUSD and USDCHF. Well, the interesting development is that GBPUSD retraced a long way and given this part of the wave structure should be the opposite to an earlier part then there is a strong chance that it will turn into a more complex correction – probably either a flat or (more likely) a triangle. This being the case EURUSD and USDCHF still have potential to deepen their respective corrections.

Thus we need to watch the initial moves today. There is little room for any corrections in these two and for the deeper corrections to be valid we’ll need a pretty persistent move back to yesterday’s Dollar peaks and later higher to the areas mentioned yesterday. During this period we’ll need GBPUSD to reflect the same.

Moving to USDJPY, all I can say is that this pair continues to frustrate, this still being in a correction of a correction also and this has really complicated the overall structure. I’m not convinced we’re going to see excessive strength at this point as the drop below 93.26 does seem to argue for losses. There’s actually a series of resistance points between 93.93 and 94.38 with an alternative projection at 94.22 and thus I feel we need watch the 93.93-94.22 area closely. Reaction here would confirm my bearish preference… or confirm that I’m wrong…

I do feel that the JPY crosses should be moving lower soon but there is still some short term risk of some playing around in ranges. Clearly a bearish EURUSD would help – and subsequently a bearish EURUSD. The interesting point is that GBPJPY doesn’t look as bearish as the others and that may well fit in with the expected sideways range expected in GBPUSD…

I was wrong yesterday but I still feel USDCAD should see a correction higher but we’ll need some strength to show through promptly…

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 (35 pips).

Good luck.
Ian Copsey

Wednesday, July 22, 2009

Targets met and now we should see the Dollar correct higher

I was mostly very satisfied with the analysis yesterday with the Dollar finding lows right around the expected levels and which then provoked a sharp reversal. This puts the overall structure right where I had been expecting and it does seem to imply a correction higher for today at least and will probably stretch a little into tomorrow. Following that we can expect further losses into Friday and possibly Monday which again should spark a much larger reversal.

In general I expect the Dollar to recover to around 1.4000-50 EURUSD, to 1.0789-1.0844 USDCHF while GBPUSD led the way yesterday much earlier with its drop from 1.6557. This is where I must ass a word of caution. The retracement target for GBPUSD should be in the 1.6321-56 area. The problem here is that yesterday’s decline has already reached 1.6383…

Unless we see the reverse of yesterday with GBPUSD recovery ahead of EURUSD and USDCHF we shall have to watch very carefully how this Dollar pullback develops and accept the possibility of a more conservative target for the latter two. Ideally I’d like to see GBPUSD enter into a sideways consolidation while the other two play catch-up. If this doesn’t happen then the alternative of a more limited correction is possible. Therefore do take care.

Now USDJPY looked quite positive with its bounce from 93.75… but then it crashed down to just above the 93.26 swing low. This is beginning to suggest that we have already seen a peak in USDJPY. It won’t be confirmed until that break is made but when I looked at the JPY crosses the glaring risk to me was an acceleration lower. I can’t rule out a sideways consolidation today but just keep in mind the potential for a shock decline that would quickly take USDJPY back towards the 71.74 low…

AUDUSD is mixed – though for today bearish and I sense that here too the risk may well be strongly lower and may have something to do with the decline in USDJPY. I suspect we’ll see 0.7991-0.8025 at a minimum but if this breaks the next target is at 0.7925…

USDCAD should correct higher along with the European currencies.

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 (81 pips).

Good luck.
Ian Copsey

Tuesday, July 21, 2009

The larger risk is now for the Dollar to reverse higher but beware of a possible marginal new low first

Yesterday’s movements were close to expectations and are encouraging for the overall corrective structure with Dollar weakness seen towards the rough support level expected against the European currencies. However, this being the case I feel we are due a pullback over the next day or two once the targets have been achieved. One surprise was GBPUSD which, after holding back compared to EURUSD and USDCHF, came powering higher yesterday to reach the sort of resistance levels I had been anticipating last week. That in itself is also a positive point for the correlation of expectations over the next day or two.

Basically today looks as if it can extend the Dollar’s losses by just a little more and I have to allow for 1.4300 EURUSD, 1.0623-33 USDCHF and 1.6581-93 GBPUSD. However, once seen the pullback can be expected to develop and this should be relatively deep. That should leave the way open for final Dollar losses into sometime next week.

USDJPY managed to provide quite a firm showing yesterday but the 94.71 resistance basically held with 6 points slippage and probably means this is already in a corrective structure that should eventually break for gains towards the 95.30 resistance at a minimum. But we should be patient since there is still chance of some consolidation first…

The strength shown in USDJPY also spilled over into the JPY crosses which therefore saw a stronger follow-through higher. I feel these still have a little more to go so quite probably we’ll see USDJPY modestly firm while the European currencies see modest strength today before correcting…

The same can be said of AUDUSD and USDCAD, both of which provided the sort of follow through anticipated but equally do not seem too far of their respective targets.

So in summary it looks like in the main we’re going to see some mild extensions of yesterday’s moves but expect corrections very soon…

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 (70 pips).

Good luck.
Ian Copsey

Monday, July 20, 2009

We should see the Dollar lower today but correct higher later

Overall Friday was not too far from what I expected but does add to the growing evidence of the fact that we are still in a corrective pattern and as such, with the exception of USDCHF, tends to suggest we’ll not see any break out from recent ranges against the Europeans. I singled out USDCHF since there is a stronger risk that we’ll see the 1.0590 low broken briefly.

However, talk of retesting 1.4338 and 1.0590 is a little too premature. At the moment we still appear to be on course for tests of 1.4265 EURUSD and 1.0652-73 USDCHF. The picture in GBPUSD hasn’t really developed the way I had expected so this will require a little more attention. Basically I feel it will follow its European compatriots but I’m rather less confident that we’ll see a push above the 1.6479 high on this rally. Once these targets are met we can look forward to more erratic and confusing trading…

The JPY crosses appear to be locked in ranges as well. While Friday didn’t really see the expected declines, with the exception of GBPJPY, these too appear range locked and I’m not too confident we’re going to see too much movement here either. USDJPY reflects this too but with the Europeans expected to gains some ground against the Dollar, the downside does seem to be implied by steady crosses.

Certainly this is a currency pair which is trading particularly erratically at the moment and it’s not one to really take on too much risk at the moment until the larger pattern becomes clear. If I have any preference it is still that we could see this pullback higher reach 95.30 but I’m doubtful this will happen today and prefer a more range trading stance today.

AUDUSD also looks range bound but still has a little way to rise within that range. I suspect we could see a move back close to the 0.8071 high in the meantime but I feel it is more likely to fall back before it can make a more sustained move higher. However, watch USDACD carefully as it’s very close to breaking down and any move below 1.1113-35 would cause follow-through to 1.1000-10 before a correction back higher…

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 (73 pips).

Have a profitable week.
Ian Copsey

Friday, July 17, 2009

The Dollar should lose against the Europeans today

I was pleased with some of the moves which hit very close to key support/resistance while a bit frustrated with others which saw deeper than average pullbacks. The clue I can take from these deeper pullbacks is that they normally occur in corrective structures and this tends to support my view that the Dollar weakness we are seeing is not part of a new downtrend but merely a correction within a correction.

Corrections can be complicated. Corrections within corrections can be a nightmare and that really forewarns us to be more careful with our trades. However, overall in the European currencies I feel the expectations I had have been largely fulfilled and I therefore suspect that by the end of the day the Dollar will have weakened further – targets around 1.4265 EURUSD, 1.0624-55 USDCHF and 1.6535-45 GBPUSD. All these areas are expected to hold and cause corrections.

Now USDJPY isn’t quite so straightforward. This was one with a deep pullback and opens the risk of further losses. Of all pairs I find this one the least clear and I sense it is a pair to leave well alone today. The JPY crosses to me look weak but only after a little more sideways consolidation. If my expectations for a higher EURUSD and GBPUSD are correct then it probably implies sideways to lower trading, but I’m not sure this will be aggressive if seen – more corrective in nature again.

Thus, if I have any preference it is to look harder at the European currencies which seem to have a more robust structure.

I feel AUDUSD may well see 0.7980-00 again but this too should progress to the 0.8080 target and potentially a little above to around 0.8105 but then pullback lower. USDCAD still seems to be in its larger correction and I’ll expect this higher by the end of day also…

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 (115 pips).

Have a great weekend.
Ian Copsey

Thursday, July 16, 2009

While I expect extension of yesterday's moves these should be less aggressive

The Dollar weakness against the Europeans did not come as a surprise. Its strength against the Yen did…

The analysis took longer than usual this morning as I took a long hard look at what is going on. Starting with the Europeans I have suggested that this Dollar weakness may extend through to the end of August. I am now slightly doubtful of this. I do think the Dollar will weaken further but we’re going to have to see how this develops. If it becomes a strong trending move then I’d even put a target of 1.5750 EURUSD on it…

However, I took a step back this morning and looked at what this implied in the daily chart and while the 1.5750 level is implied and will broadly continue to be so, I feel that a direct move is not necessarily a done deal. Even yesterday USDCHF didn’t power through that strongly and I thought GBPUSD showed quite a bit of restraint too. It therefore strikes me that we’re actually still in a daily sideways consolidation.

We should be able to confirm this over the next day or two. If EURUSD stalls at 1.4265 and corrects while USDCHF fails to move below 1.0590 and GBPUSD stalls around 1.6573, then the risk will most definitely be a retest of the old 1.4338 high in EURUSD, possibly a dip to 1.0488-1.0527 USDCHF and the 1.6743 high again in GBPUSD. Then we could see the entire correction recycle back from where we have just been

Today should provide an important contribution to this picture…

Now, the break in USDJPY above 93.93 did come as a complete surprise. This currency pair has been failing in the normal degrees of wave relationships which is frustrating the process at the moment. It could be just a brief pullback but considering what is happening elsewhere I feel we need to be cautious here. The JPY crosses all seem to require further gains and thus we’ll have to see how much USDJPY can drive this versus the Europeans. However, overall I do feel there is a little more upside due in this today.

AUDUSD has a limit at 0.8056-80 and a pullback is due while USDCAD is a tough nut to crack when the pullbacks are so shallow. I feel it must see a deeper correction at some point, but overall the downside does still seem attractive.

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 (290 pips).

Good luck.
Ian Copsey

Wednesday, July 15, 2009

The Yen should strengthen all round today

The decision of whether to be Dollar buyers or sellers required too much commitment from the market and by a whisker EURUSD and USDCHF saw the medium term Dollar bullish structure remain intact. USDCHF rallied relatively well but EURUSD remained subdued and has left the status quo unchanged.

I still face the same problem. We are just two weeks away from what I had considered as the probable timing for the next Dollar high. With targets at 1.2850 EURUSD and 1.1650 USDCHF there has to be some sort of dramatic change in the collective market mind-set to provoke a move of that magnitude. I am also mindful that daily cycles are basically Dollar bearish into the end of August/beginning of September which is where I had considered the end of the triangle should occur.

Either I have got my cycle timings wrong and thus we can still see the rally, then pullback to complete the triangle but at a later date – maybe late September/Early October – or these bearish cycles will generate direct losses from now into the end of August…

The European currencies’ analyses will therefore remain neutral and watching key break levels until we have a more definite signal.

Now, USDJPY looks a lot more interesting. I think there to be a strong chance that this morning’s peak at 93.76 will be the highest we see for a while – or if it breaks then 93.93 is the reserve resistance. Equally, I see the JPY crosses having found their respective highs or perhaps have a final peak to make but overall these look bearish too. How quickly the crosses decline will depend on whether EURUSD and GBPUSD decline today and if so how fast.

Indeed, probably the Japanese Yen (direct or crosses) will provide the best trades today…

AUDUSD seems to have a good chance of capping below 0.8003 while after its fall off a deep cliff USDCAD seems to have the opportunity to recover today.

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 (155 pips).

Good luck.
Ian Copsey

Tuesday, July 14, 2009

There must be a swift rally in the Dollar else breach of today's lows will cause a larger reversal

Not a lot went right yesterday. I can’t say the medium term expectation of a daily triangle in both EURUSD and USDCHF have been broken yet, but the wave structure to support this move is now being stretched to the point that we really need the Dollar strength to develop very quickly else the entire long term structure begins to take on a completely different look.

As way of background I have been looking for Dollar strength to emerge from September into early next year. However, this was seen as corrective only with the larger cycles still pointing to excessive Dollar weakness into 2012-2013. If the current Dollar bullish structure breaks down it begins to look more as if the weakness will start from here. Of course, there is always potential for recycling of corrections that can complicate matters but for the Dollar at this point in time the implication is that we are about to see a significant break out – and it’s all down to which of the current structures breaks down…

EURUSD is still just about holding below the 1.4007 resistance and USDCHF above the 1.0790-08 support. If these break it is going to be almost impossible – well, probably totally impossible, to maintain the Dollar bullish view…

USDJPY already has a Dollar bearish outlook although I’m less keen on an excessively bearish one at the moment (by that I mean a move towards the 87.10 low.) However, this point in time does seem to be pivotal and today it would be prudent to watch exactly what happens. I don’t like making excessive calls but we can at least react to break levels and see where this takes us in whichever direction…

So I’m going to leave the overall expectations today as neutral and wait to see how things develop and keep in mind the potential for a stronger directional move if we get a break out.

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 (105 pips).

Good luck.
Ian Copsey

Monday, July 13, 2009

The first half of the day looks quiet but look for Dollar gains later

From Friday’s moves it certainly looks as if the Dollar has resumed its medium term rally against the European currencies. Confirmation should come today with follow-through that extends these gains to new highs or at least challenges them. With a target in EURUSD around 1.3550-1.3650 ideally I’d like to see quite a strong move today though it may not initially be direct with the old 1.3832 and 1.3747 lows being the near term barriers followed by 1.3705. Equally in USDCHF the 1.1021 area is the closer barrier above which lies the next potential resistance at 1.1069 minimum and possibly 1.1135.

In Friday’s moves GBPUSD lagged its neighbors in the strength of the move but still I anticipate this will move to retest the recent low at 1.5982 at least. I’d like to think that it could challenge the 1.5801 low at some point but it may not be in this current decline…

Moving to USDJPY, the 93.59 high proved to be the top and Friday saw a steady, if shaky, decline over the day to retest the old 81.79 low. It looks more to me as if this has more chance of the correction continuing for another day or so but will probably mean a rally back to the 93.59 high and possibly as much as 93.93. However, overall I’ll see the 93.59-93 area as a selling point for another leg lower to 90.49 minimum and at most 89.91 over the course of the week but this should prompt another correction higher.

With the expectations of a higher USDJPY and higher Dollar against the Europeans the chances therefore favor a sideways correction in the JPY crosses. If any of these looks as if it may buck that trend it is AUDJPY but I don’t foresee a dramatic loss at this point. More likely it will match the others in a sideways consolidation but with a little less upside.

And this latter comment on AUDJPY also depends on whether AUDUSD resumes its losses directly or sees its own consolidation. I prefer a more direct bearish view to match with the Europeans but this is a situation that will need to be watched carefully. Finally, USDCAD looks as if it should also join in the U.S. Dollar rally but take care here as there is a hint it could be quite strong so don’t get caught off guard.


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 (25 pips).

Have a profitable week.
Ian Copsey

Friday, July 10, 2009

The Dollar should resume its rally against the Europeans

As far as the European currencies are concerned the analysis yesterday was spot on. Even if I feel good because of this there’s no room for getting carried away since it is not an uncommon occurrence that the market then turns haywire and completely destroys the medium term analysis. However, what I can say is that yesterday’s Dollar lows must now hold else it will throw current assumptions out of the window and require a total overhaul – probably with a larger Dollar downtrend…

Everything has gone to plan and thus I’ll stick with it and with the medium term analysis that within 3 weeks or so we should be seeing the Dollar much higher – but also finding a high. In the short term there is still no confirmation of a reversal and thus we still need the Dollar to resume its underlying rally over the course of today… The key Dollar resistances to overcome are at 1.3935-45 EURUSD, 1.0850 USDCHF and 1.6190 GBPUSD…

Once these are broken we should start to see consistent gains in the Dollar with the old highs providing only a temporary barrier. EURUSD has potential targets at 1.3623 and 1.3547 while targets in USDCHF are less obvious since we are looking at different parts of the structure and this will require some initial gains to be made to be able to identify the eventual stalling point. Given where we are I imagine that some time mid-end next week will see the Dollar reaching these targets.

Now onto USDJPY. Well, it rallied much as expected but has done enough to complete a correction but from what I have seen so far I can’t really be sure that it has found its corrective high… Therefore this one and the JPY crosses need to be played with kid gloves. I feel there is still some upside potential in the crosses and this tends to edge me towards a higher USDJPY – but will also mean that the Dollar’s gains may well be limited in the first half of the day. Do take some care with these…

AUDUSD is much the same – I wouldn’t be surprised to see it edge just a little higher towards 0.7900-40 but I feel the next move should then be lower. The whip lower in USDCAD was not foreseen though now I look at it I feel I should have seen this alternative. However, while yesterday’s low holds the upside should resume but this time it looks as if it can get above 1.1755 – potentially to the 1.1825-32 area.

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 (105 pips).

Have a great weekend.
Ian Copsey

Thursday, July 9, 2009

The Dollar should lose ground against all currencies today

Yesterday was a day with two separate stories… USDJPY was the big surprise as the consolidation I had been assuming was blown away as it nosed dived through all supports to reach 91.79. Well, I had indicated the 91.69-88 area as the next support after 93.13… not that I had expected it to actually get there…

Now we have seen this break I have to work out how this changes the outlook. While it does seem a dramatic shift from expectations, what has actually occurred is the drop I had anticipated after the consolidation had completed. Has it ended? I don’t think so. How far can it go? Down to between 89.91 and 90.49 and I’d reckon the higher of these two. Before that I don’t think we’ve finished the correction from 91.79 and I wouldn’t be surprised to see this reach closer to 93.62-93. We also need to be cautious around 93.30.

On the other hand the Europeans actually performed well under the more sedate consolidation scenario. Dollar gains will come but more likely we are going to have to be patient. Only if yesterday’s Dollar highs and are taken out would I begin to shift on this. However, if you look at the three currencies in question they are sporting some bearish Dollar divergences in the hourly charts and given that EURUSD and GBPUSD met targets well I do suspect we’ll see the Dollar weaker today to return to the recent Dollar lows. USDCHF may even extend to the 1.0744-60 area…

Once these corrections are complete (or I am wrong and we’ll see direct follow-through) then the larger Dollar uptrend can resume. I think the next targets we’ll be looking at are at 1.3525-1.36 EURUSD and 1.1240-65 USDCHF. The Pound is a little more complex as it is not in the same position. I’ll have to look at this one later when the correction is complete.

I left the JPY crosses until now since these too are in a slightly different situation to USDJPY. I do feel we shall see new lows but these shouldn’t be too far down. While USDJPY can decline, since I feel the Dollar will lose out against the Europeans its going to cause mixed impact. However, overall it should be extending the correction this morning, seeing a new drop but then a much larger recovery as the Dollar strengthens against both the Europeans and the Yen as well after its next dip. The issue here will be which happens first…

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 (245 pips).

Good luck.
Ian Copsey

Wednesday, July 8, 2009

Today calls for care to be exercised...

I found yesterday’s moves quite strange. They didn’t seem to provide any consistent correlation across the range of currencies and certainly has put me on the defensive. I do sit back and think about the forecast for EURUSD to be at 1.2850 and USDCHF at 1.1650 by around the end of the month which means it really needs to get its skates on and I could interpret yesterday’s moves as a deeper correction which would then allow stronger follow-through today. This morning has started out with Dollar gains and so let’s just keep that in mind and I’ll try and identify the resistance areas to watch for that would support that more direct argument…

The area to look out for in GBPUSD is at 1.5949-1.5996. There are a few projections lying in this area and if it breaks then the 1.5801 low will be the next target.

Equally USDJPY is also moving lower which has the double impact on the JPY crosses. There are still some potential complications in terms of complex corrections but we are very close to breaking supports which would open up the floor and allow losses to accelerate. Given I feel we’ll retest 93.84 USDJPY and EURUSD breaks below first the 1.3876 low followed by 1.3810 it would seem to suggest that this larger bearish scenario could well come to fruition.

AUDUSD has initial support around 0.7810 and while a correction from there is on the cards the picture there remains bearish too. USDCAD has targets around 1.1755-84 so watch out there. Breach would imply a stronger follow-through.

So all-in-all let’s just say that this scenario isn’t quite what I had in mind, so I am rather hesitant to push it strongly. However, if the sort of levels I have mentioned break then watch out for a much stronger Dollar… and if these levels hold then the prospect is for some messy consolidation for what should be the rest of the week…

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).

Good luck.
Ian Copsey

Tuesday, July 7, 2009

The corrections to yesterday's rally appear complete and should trigger further gains

Yesterday didn’t quite go as planned although the underlying directions were correct. I struggled a bit with the levels yesterday but the underlying direction is Dollar bullish although I don’t think we’re too far off an intermediate high that should generate a modest correction. It may come as early as today but if I look at what is needed to complete this move I feel tomorrow is probably a more likely time for the correction to begin.

Indeed, I feel we are probably done with the corrections from yesterday’s highs against the European currencies and thus I feel that current levels are good to establish Dollar long positions again. Let’s see where things are when I’ve finished writing the report…

Overall I feel that by tomorrow we’ll be testing the 1.3474 low in EURUSD and the 1.1000-30 area in USDCHF. GBPUSD has a slightly more clouded structure but I’d tend to go for losses that can reach the 1.5960-90 area.

As we saw yesterday USDJPY is not really moving in correlation to the Europeans. The low at 94.65 wasn’t quite on the radar but close enough to the old 94.87 corrective low to leave it hanging between two scenarios still. The break level between a more bullish scenario versus bearish seems to be around 95.70-96.10. While this area caps the bearish scenario can see losses below 94.65 and down close to the 93.84 low. However, if this is seen I feel it will be a good buy. Any earlier break above 96.10 would, over time, imply a return to 98.00. Basically, USDJPY is in a large consolidation which is divided between the potential for a sideways channel (low at 93.84) and a triangle (which would have seen its low yesterday.)

I tend to be more bearish since the JPY crosses tend to look more bearish outlook. Hourly charts are showing bullish divergences while 4 hour charts are oversold which could still allow another new low. However, the break levels for this scenario are quite close as in USDJPY and we’ll need to look at these in tandem. On the assumption that the Europeans have probably completed their respective corrections this tends to argue in favor of lower JPY crosses also.

AUDUSD needs to get to 0.8000-20 before reversing while USDCAD must remain above 1.1518-50 to retain the 1.1714 and 1.1755 targets.

Today’s free analysis is for AUDJPY and can be found on
http://www.fx-forecaster.com/DailyForecast.html along with yesterday’s trade set ups (195 pips).

Good luck.
Ian Copsey

Monday, July 6, 2009

In general the Dollar rally should continue against the Europeans

Over Thursday we saw the Dollar fail to see any significant pullback and losses resumed directly and quite firmly. This continues to add to the evidence that we have seen a major Dollar low and does open the rest of the month to what should be, if my projections for month end are correct, quite a strong and persistent rally. It is doubtful in this scenario that any correction will be particularly deep.

Well, that’s the assumption I am looking at and what is now required is continued support for this view. I have only one small conflict to sort out which is the apparent difference in the structural position of EURUSD compared to USDCHF. I have them both in anticipated daily triangles but the rush up from 1.0631 to 1.1021 in the latter appears to lead EURUSD in their respective structures.

It does strike me that if we are going to see any deeper pullback then it should probably be in the early stages of this rally and therefore until the potential deeper correction is confirmed or denied the navigation of the next few days will require a little care.

This doesn’t really impact on GBPUSD which has its own entirely different position – that we are probably seeing a correction to the entire recovery from 1.3501. Quite how deep this will be is not obvious but considering the twin lows at 1.3501 and then 1.3653 the risk is that the anticipated correction will be quite deep also.

USDJPY failed to move higher on Thursday and saw a pullback instead. It does seem to imply that it will remain in a sideways trading range. There is a choice of scenarios here also – one being that the 95.30-60 area will support to imply a move up to 98.22 while the second is a drop through 95.30 that would imply a retest around the 93.84 low before recovering. So the short term focus is on the immediate 95.30-60 support – and we should play our cards once price has determined what it wants to do…

This should have its impact on the JPY crosses – though any strong reversal higher appears unlikely due to the bullish Dollar expectations here. Equally, the short term holds the most uncertainty as described earlier so be prepared for what could be some choppiness.

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

Have a profitable week.
Ian Copsey

Thursday, July 2, 2009

The long consolidation appears complete and should provoke stronger Dollar gains

Please note with tomorrow being the July 4th holiday in the States the next report will be on Monday July 6th.

I’m pretty satisfied with yesterday’s movements. Specifically the high in EURUSD smack in the middle of the target zone and the low in USDCHF (although this was a touch lower than I had wanted) were on line with the structures I have been viewing. When matched with the fact that GBPUSD and AUDUSD failed to follow behind the Euro when I had cautiously felt that they had seen their tops does bode well in terms of finding this final high…

I think it’s over. I do see a risk of one small spike higher in EURUSD and while it should be kept in mind the timing, levels and structure all seem to slot in and should now mean we’ll get the underlying Dollar rally resuming over the rest of this month. Given my targets at 1.2750-1.2850 EURUSD and 1.0650-1.1750 USDCHF this sure looks as if it could be a very direct and consistent rally…

So, with only the minor risk of minor new Dollar lows today I feel we can concentrate… at LONG last… on buying Dollars.

Now, this begs the question whether USDJPY can jump on the Dollar-Europe coat tails and manage to pull itself above the 98.87 and 99.74 highs. To be honest, as I see things right now, I’m not sure it will. I do see some early strength but whether it will get above 98.22-56 is another question. This area certainly holds the key to a stronger move higher and unless it breaks it could easily remain in the 95-98.50 range for some while… This will be the basic analysis but of course we shall need to watch carefully in case it does indeed hitch a lift.

Elsewhere the Pound should quickly make its way down to just above the 1.6188 low, AUDUSD similarly should be looking to retest the 0.7788 low and USDCAD… well, that has a little ambiguity but only in terms of whether yesterday’s low (and in line with my target) was the final low. I am bullish here and I’ll stick cautiously to a directly bullish view, but we have to be aware of an alternative that could see a dip to 1.1360-90 before it rallies. Ironically, it does seem as if the lower support would actually be more bullish… and that’s the reason I’m keeping this in mind.

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.

Have a great long weekend.
Ian Copsey

Wednesday, July 1, 2009

We've probably not seen the Dollar low quite yet - maybe tomorrow

There were a few good calls and a few not-so-good yesterday. The spike up to 1.4151 EURUSD yesterday didn’t quite reach the 1.4177 minimum target but then I’m not quite convinced that we saw the ultimate high yet… It has done just about enough to satisfy the upside target – as has USDCHF bouncing from 1.0778 – but there’s something about the move which seems to suggest that the Dollar low is still not yet in place.

At this point I should add given the Dollar has done the minimum required to generate a reversal (and I think this probably occurred in AUDUSD) that we should now keep in mind that a larger reversal high in the Dollar can occur at any time.

I think more likely we’re going to see a small continuation of the correction early today but this should be followed by a return to yesterday’s Dollar lows and by tomorrow (at latest Friday) this should then spurn the ultimate Dollar low and from there the medium term rally can resume.

GBPUSD looks as if it could have seen its high at 1.6743 but I don’t expect a move to new lows right now. We’ll have to play this one by ear.

Well, that’s the plan…

As for USDJPY which has largely withdrawn from action recently, the outlook has become increasingly unclear. I am a little in two minds when I look at the hourly chart but while the 97.17 high holds any corrections I have a mild preference for a dip back to 93.84 over the coming days. Above 97.17 provides a different picture, still in a consolidation, but one that could generate continued strength to 98.22 before correcting lower again. What will be interesting is how strong it can be once the Dollar begins to see gains elsewhere. I do feel this will ultimately imply strength but in the short term remains the uncertainty over whether we have seen a low at 84.87 … or whether the 93.84 area can be revisited.

The Aussie does seem to have found its high. However, I have a feeling that the first half of the day should generate a correction to yesterday’s drop from the 0.8154 high… Thus don’t expect to see new highs today. USDCAD is mixed and I suspect range bound for now – just a matter of whether we’ll see a flat correction at yesterday’s high or whether it can reach 1.1711 before lower.

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