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 along with yesterday’s trade set ups.

Have a great long weekend.
Ian Copsey

No comments:

Post a Comment