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HARMONIC ELLIOTT WAVE

Monday, August 31, 2009

USDJPY has further to go on the downside but there is a pullback to be seen first

The first move the Dollar made against the Europeans summed up the rest of the day, at least against in EURUSD and USDCHF. This should imply the former should retest the 1.4208 low while ideally USDCHF should reach the 1.0713-18 area again – but progress has been slow here so that leaves a small question mark. It in no way changes the underlying Dollar bearish view for the next 2-3 weeks and once these corrections are complete I’ll be looking for that trend to resume.

GBPUSD was a little different and may have done enough to generate a larger reversal. The initial risk today is lower and as long as it remains above the 1.6153 low I feel it should have turned the corner for a rally. However, it could well be that this morning’s decline could push that low quite hard. At a minimum I see 1.6195 and at most 1.6169 so this presents a crucial pivotal area between bullish & bearish today.

The biggest mover this morning has been USDJPY – not that it was particularly strong, but in the right direction for continued losses. The rally to 94.07 on Friday did renew in my mind the possibility of a larger reversal higher but it just could sustain that strength and this morning’s retest of the 93.21 low should bare pretty soon with a move down to around 92.18 and later to 91.70-74. Take care here.

That still leaves the JPY crosses a bit mixed though the emphasis with an initially bearish EURUSD and USDJPY does seem to imply further losses in the short term. Quite how all this will develop is a bit uncertain in my mind as I see a fair degree of ambiguity across the three pairs and given price movement recently has been pretty choppy it does suggest a complex correction. The problem I have here is that there are several potential outcomes and it’s still a case of wait & see until the pattern reveals itself.

AUDUSD broke higher but needs to renew the uptrend pretty quick to avoid a slightly deeper pullback. USDCAD may well have topped out at 1.0954 this morning – the downside still the greater risk for a test down at 1.0740-50 before higher.

Today’s free analysis is for AUDJPY and can be found on http://www.fx-forecaster.com/DailyForecast.html along with Friday’s trade set ups (110 pips).

Have a profitable week.
Ian Copsey

Friday, August 28, 2009

First movements today should define the day’s outcome


It won’t come as any surprise when I report that I wasn’t expecting that reversal yesterday… The automatic assumption I had was that this move will extend. However, there appear to a number of alternatives which is always perplexing as it becomes that much harder to offer advice. However, there are some close break levels and then not too much higher for the Dollar some more and if these break then I could even see us going straight back to the extremes at 1.4208 EURUSD, 1.0713 USDCHF and probably then new lows for GBPUSD…

So the key appears to be in the initial movements in the day. A break below yesterday’s Dollar lows extends the losses a little further but this should be followed by a pullback. Any earlier retracements below 1.4313-30 EURUSD or above 1.0600 USDCHF bring potential consolidation.

USDJPY does seem to be moving lower although I can’t say it’s making light work of the decline… The 93.85-94 area seems to hold the key and while this caps the next leg lower could be a lot more aggressive… Indeed, if this breaks lower I am beginning to think of shifting the 92.03 target to a much lower one at 90.77 although the 91.70-74 area would provide a pullback. So take care here.

If USDJPY does begin the next decline it should theoretically have the same impact of seeing them break lower also. Here I have some doubts as I’m not entirely comfortable with that – but if then there is the chance that EURUSD and GBPUSD will break higher strongly. Well, that’s not impossible but I can’t see it happening directly…

Therefore it’s another reason to be cautious and keep your eyes out on the relationships between the individual currencies and the respective crosses.

AUDUSD seems to confirm a final dip before it can rally. Whatever, yesterday’s 0.8413 high is critical now and breach will take this higher whether directly or following the preferred correction. USDCAD … well if I have any preference its bearish to the 1.0768 area but then it should still bounce before it can finally follow-through to new lows.

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 20 pips).

Have a great weekend.
Ian Copsey

Thursday, August 27, 2009

Early trading should see some consolidation but expect further Dollar gains later

Well, the Dollar bullish outline I described yesterday wasn’t as radical as first thought… It does clear up a lot of issues for me in terms of aligning both the respective structures in the Europeans and also the eventual targets. If anything, the deeper decline GBPUSD does place a question mark over the eventual target but for now, given this part of the bullish Dollar correction is close to ending I’ll begin to look at the reversal later.

The sort of targets I’ll be looking for are at 1.4094-04 EURUSD, 1.0767-98 USDCHF and in the Pound… well, I have to be a bit more cautious here, but either the 1.6095-05 area or possibly as deep as 1.6055-65. Once these moves have been seen this will take us back into range once again for probably another 3-5 days before the final Dollar decline can be seen into cycle lows around mid-end September.

Now, USDJPY… It huffed and puffed and didn’t break any support or resistance… and it may well continue today but the lack of any real recovery is reducing the chance of seeing 95.36. Right now we are seeing a test of the 93.90 support which is more in line with a triangle – and almost certainly a bearish one… This should imply one last failed attempt higher following which a break lower will send it tumbling lower en route 92.03… The only chance it has now of reaching 95.36 is a break above 94.46-56…

So that should also impact on the JPY crosses and this could look pretty bearish across the board too with the Dollar looking firm for the day against the rest of the world. Therefore be prepared to jump on the bandwagon since it should prove to be a profitable ride…

AUDUSD looks sick. It may last out for a further corrective rally but much below 0.8252 will see a sharp drop too. Target here us around 0.8183-0.8214 at least and may even reach the 0.8157 low… USDCAD is also looking at risk of another one of its sharp moves with the 1.1048-95 area the first target – and may hold. If not, then look for 1.1177-1.1213…

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 30 pips).

Good luck.
Ian Copsey

Wednesday, August 26, 2009

The picture is mixed and I can foresee the possibility of Dollar gains today

Yesterday seemed to blow all short term structures out of the window. GBPUSD broke lower but couldn’t sustain that move, while EURUSD and USDCHF saw triangles fail and then the apparent resumption of the Dollar losses stalled and provoked a reversal that seems to contradict the Dollar bearish view. Is it then some kind of strange and erratic correction or …

Well, it took me back to the daily charts. Take a look at USDCHF in particular. Since the original 1.0590 low back at the beginning of June the range has been tight and small breaks only provoke a reversal back in the range. EURUSD hasn’t set the world alight either, breaking above the prior 1.4338 but then making a complete hash of trying to force a move higher. Yesterday, GBPUSD broke lower but couldn’t sustain the move…

For a while I have been looking at the daily charts and trying to apply some logical structure to them within the bounds of the bearish Dollar cycles and coming to a half-conclusion only. This does appear to be some complex correction within a final corrective pattern ahead of a final Dollar decline into next month from where I expect the Dollar to rally sharply.

Given yesterday’s moves I am edging towards a scenario that would call for a larger pullback into the past few months’ range. It does seem rather a radical type scenario but the thing I do like about it is that GBPUSD can make a new low, and USDCHF gets its pullback which the daily chart seems to be screaming for – and now EURUSD seems to be coming in line with the others… Let’s treat this cautiously at first, but if we start getting stronger confirmation it will be well worth watching…

USDJPY dipped as I had though to the 93.72-90 area and although its near-term future is in the balance it can still hold a bullish structure until yesterday’s low is taken out. It will be best to watch for breaks of either 93.72-78 on the downside or above the 94.25 – and then 94.62 corrective highs. One of these should generate the next move and if my view of the Europeans proves correct the rally to 95.36 could well still be on. It is really tight at the moment so take care. If the downside falls then we’re on out way to 92.85 and 92.03.

Today’s free analysis is for GBPUSD and can be found on
http://www.fx-forecaster.com/DailyForecast.html along with Friday’s trade set ups (-105 pips).

Good luck.
Ian Copsey

Tuesday, August 25, 2009

The Dollar looks like seeing a pullback higher before additional losses

I can’t say yesterday was quite what I had expected but it was interesting… and may even be throwing a small spanner in the works.

Let me start with USDJPY. This worked perfectly really didn’t it? Well, the top between 94.90-95.20 was smack on target but the decline from there hasn’t really set me alight with enthusiasm for the downside. This should have been a peak from where the next decline to 92.03 should launch and with that expectation also comes a requirement for how that should develop – and so far the decline has more corrective tendencies rather than trending.

From that perspective I’m pulling the plug on the direct decline and beginning to sense that we could even see a rally to 95.36 from where the next bearish leg should develop. The intermediate question is just where any correction from 95.06 should end… I can’t even rule out 93.71 before a second rally… Let’s just say that until that area breaks the upside remains a threat while below the 93.41 low would seal the downside fate.

Next the Europeans… Well, they didn’t get very far did they? I’m beginning to think that we may have seen an intermediate top at 1.4369 (and not the 1.4406 level I indicated yesterday) and this implies a pullback to 1.4203-28 before higher again. The confirmation of this comes on a break of 1.4280 and until then There is every chance we’ll see a pullback to the 1.4320-30 area…

Translated into USDCHF we should be looking for a move to 1.0667-86, a break above 1.0629-32 providing the trigger and until then a pullback to around 1.0590-00. For GBPUSD this actually appears to point to a new low below 1.6277… A break below 1.6376 will be the trigger and should extend to 1.6301 at least and I feel a spike down to 1.6214-32 is the most likely target. From here look for a solid rally.

Now, how this impacts on the JPY crosses is hard to be exact, but my feeling is that we’re finding corrective lows around current levels – the 134.55-65 EURJPY and 78.55-74 AUDJPY supports likely to hold while GBPJPY does seem to have a slightly stronger bearish look about it – which seems to match with the bearish GBPUSD view. Here the 153.46-57 lows are more likely to be retested before rebounding.

Thus, keep an eye on breaks and watch for the right patterns to develop – although frustratingly these have not been abundant recently…

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 (0 pips).


Good luck.
Ian Copsey

Monday, August 24, 2009

There still seems limited room for follow-through from Friday’s moves

Friday’s early correction developed almost to expectations but the failure to reach the retracement targets I had set (apart from GBPUSD) was actually a warning that the expected return to new Dollar lows may not be marginal but actually continue the downtrend – and this is what happened. It does seem to point to fairly direct continued losses but while a new low is expected in the first half of today this should be a brief stalling point for a day or so.

Barriers… Well, 1.4406 EURUSD looks firm while USDCHF has two potential areas and probably we should pay more attention to the closer which is at 1.0539-42. However, with this pair also note the 1.4486 area. I would also point out that if the 1.0486 area is reached there is also one scenario that would call for quite a substantial correction – but let’s first watch the two supports and see what happens first.

GBPUSD may well have found its low at 1.6470 though there is the ascending triangle support at around 1.6435-50. Here we need just to be a little more careful. If this has been an ascending triangle – and there is a little question market over this due to the variance of the peaks between 1.6591 and 1.6621 – then the implication is for immediate direct gains. However, this does seem a little at odds with EURUSD and USDCHF. Therefore, it will be prudent to wait for a break of 1.6621 before committing too strongly here.

USDJPY performed pretty close to expectations, a new low but which remained above 93.32 and by the end of the day rallied strongly. It has done enough to complete a correction but while this morning’s 94.18 low remains intact there is room for a move into the 94.90-95.20 area. Whichever it is I am looking for a stronger move lower now – and one that should reach the 92.03 area over the course of this week.

This brings the question of the JPY crosses and what will occur here… The recoveries seen on Friday looked quite positive. I don’t want to get carried away here because of my views on Dollar-Europe pairs. It could be that we’re going to be locked in a range for a while so I feel that committing too much could be a risk. I feel it better to take shorter time-frame trades.

AUDUSD should be moving back to the 0.8469-76 highs before correcting while USDCAD may well be contained by the 1.0741 support…

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).

Have a profitable week.
Ian Copsey

Friday, August 21, 2009

There is still risk of range trading but today I do expect to see marginal new Dollar lows


I had been expecting range trading yesterday but had considered a marginal Dollar low to develop first and then to be followed by consolidation. In fact, range trading began the day and never really saw any break out at all – except in USDCAD. Well, from what I can see the range trading seem most likely to persist for the first half of the day at least before that marginal new low looks as if it can be reached.

So it looks like being a pretty boring pre-weekend market that will probably thinking more about what’s going to happen over the weekend rather than trying to push boundaries. The strongest scenario I can see is for the Dollar to drift back higher to the 1.4189-00 EURUSD and 1.0683-02 USDCHF resistance levels and from there look for the moves to 1.4327 EURUSD and 1.0542-73 USDCHF.

GBPUSD is a bit mixed but if I can see anything that will fit into this general lethargy then there’s a case for a similar move but remaining within the 1.6425-1.6596 range.

USDJPY made a big effort to rally towards 94.95-20 but failed miserably but until it breaks below 93.66 I still hold out for a recovery back to the 94.55 high and possibly as far as the 94.95 area (max 95.20).This is the most I expect on the upside and the subsequent risk is then very much lower…

That could drag up the JPY crosses (eventually) over the day but probably just EURJPY and AUDJPY to reach some marginal new highs. Beyond that I’d like to evaluate but the implication to me is that the downside then becomes back into play… GBPJPY may well remain range bound.

AUDUSD mirrored the movements in the Europeans and I feel this will probably be repeated today while USDCAD dropped nicely and this may well extend towards the 1.0792 corrective low today but probably not break below.

Take things carefully today. I do feel a bit of patience is called for and wait for the support & resistance that should provide the barriers to take a slightly longer term view rather than quick in and out trades.

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 (50 pips).

Have a great weekend.
Ian Copsey

Thursday, August 20, 2009

We should see mostly range trading but only after a marginal new Dollar low

Early trading yesterday was quite defensive as I had thought but the end of the day spurned a sudden rush to the downside for the Dollar. It should still have further to go but while the first half of the day could see additional losses against the Europeans I don’t think this will extend too far – probably the 1.4300-10 area EURUSD and 1.0542-73 area USDCHF. On GBPUSD I am less certain but if this pops up too then the 1.6637-53 area should be tops.

This should then cause a slightly longer correction and once this is complete the next leg lower can be seen that will challenge the 1.4445 high EURUSD and well, we’ll probably see as low as 1.0458 or 1.0390 USDCHF… However, the implication is that we are unlikely to see a repeat of the sharp losses today but will have to be patient for another day or so…

USDJPY dipped nicely to the expected 93.75 target and just below to 93.60. This too looks like it now requires a correction higher and I’m looking for this to resume before too long towards the 94.95-20 area. That’s probably as much as we get and after that the downside will be at risk once again. For today I feel the 95.90 level should hold any pullback now for the rally.

This should give some early lift to the JPY crosses for the duration of the bullishness of USDJPY and while the Europeans are consolidating. Given that AUDUSD is also expected to see a small correction this could keep AUDJPY in a range but probably a slightly higher one but then we’ll have to see how the balance between USDJPY and AUDUSD develops.

USDCAD saw the heavy losses I felt were at risk. Right now we are seeing some consolidation but the downside is still definitely a risk and remember that a second sharp decline is something I can’t totally rule out…

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 (0 pips).

Good luck.
Ian Copsey

Wednesday, August 19, 2009

This could prove to be a choppy day today

Trying to find a way to express my impressions about the market has been rather difficult today. I could make an attempt by saying that there appear to be sub-structures within the main structures that provide a great deal of confusion and uncertainty. I’m not sure that will actually convey my thoughts.

On the one hand I can see that looking at the larger hourly/4 hour charts I can see reasons to suggest that in some cases yesterday’s corrections reached the right sort of level that would still allow the underlying trend to resume. However, digging deeper into the 5 minute charts brings up an array of conflicts and so my so that I do feel we need to approach the market carefully today.

If I am to take any stance then it is that the first reaction today is to see corrections to the moves during new York. Then I feel we need to see where this leads us and wait for breaks. Indeed, in some cases the breaks of the extremes seen in the pullback yesterday would appear to suggest that the larger Dollar down trend will resume. Thus I will attempt to highlight the pivotal areas that would provide the difference between the resumption of Dollar losses and a slight deepening in the recovery. Overall I do have a preference for the Dollar downtrend to resume but the key is establishing just where the cut off in the opposite direction lies.

Even in USDJPY this ambiguity has arisen too. It held the 95.34 resistance well and this tends to bode well for the downside to continue. However, since the high the wave structure has become very strange and I can’t say the downside is nailed on to continue – although it would be my preference.

Of course the other scenario to consider is that the Dollar doesn’t confirm a break in either direction and begins to map out a consolidation pattern. Having introduced this must highlight how confusing the current picture is. Given the market’s complete lack of committing to any direction for any meaningful period is enough to suggest that we should also take this seriously.

Thus, today’s analysis is going to be couched on the defensive side and I would suggest that profits are taken quickly if seen.

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 (97 pips).

Good luck.
Ian Copsey

Tuesday, August 18, 2009

There does still seem room for a small extension in Dollar gains but watch out for a reversal

Early Dollar strength turned into persistent strength over the day and frankly quite surprised me. I have had to search for an alternative. That’s been a little tough but I do feel the extent of the rally is probably very close and is probably already completed in USDCHF. I suspect that the Asia hours through to early Europe will see the correction continue from yesterday’s highs but by the European afternoon it should be heading back higher again. Tentative targets lie at 1.4014 EURUSD and possibly around 1.6210-30 GBPUSD. As I mentioned USDCHF looks like generating a pullback towards yesterday’s 1.0832 high but I’m less convinced we shall see a new high there.

Once these moves have completed I am more in favor of the Dollar downside to come under attack. Given the slight uncertainty over the wave structure is will be best to have the support & resistance confirmed by price reversal patterns…

USDJPY declined rather shakily but bounced from just 3 pips below the 94.23 support. This looks more bearish to be honest and while a correction to 95.06-14 is likely to cap (but allow for 95.34) I feel we’ll begin to see losses develop here back to the 91.74-92.03 area… Assuming this happens then I feel we are more likely to see a correction but still then losses…

This also reflects in the JPY crosses which look pretty groggy. These too appear to be going through a correction as in USDJPY but once over the next move should be back lower again. The only one to look out for is AUDJPY since AUDUSD does look as if it should rally back to its highs (though a small correction is currently due.) Thus AUDJPY may have more consolidation before that can rally.

USDCAD has its own mind but I still tend to prefer the downside – I feel we should be looking for bearish reversal patterns here…

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 (120 pips).

Good luck.
Ian Copsey

Sunday, August 16, 2009

Early trading needs a bit of care but the Dollar is expected to lose ground against the Europeans

Friday began close to what I had anticipated but didn’t end that way… The deeper pullback in the Dollar surprised with EURUSD dipping off deeply by the end of the day in particular. It still doesn’t shake my basic Dollar bearish view. It may well eventually limit the targets and may even cause this week to see broad range trading though my preference does more lie with direct losses on a more cyclic basis rather than from structure.

Indeed, we have just two weeks left in August and we should allow for one week in September (at a stretch two weeks) before the Dollar should find quite a significant low from where I’ll be looking for broad Dollar strength into the end of the year.

The inconsistency between EURUSD and USDCHF continues. While the Euro was crashing lower USDCHF was really quite resilient to any Dollar strength. The interesting part of this is that it retains quite a strongly bearish structure in USDCHF to 1.0562 minimum and I have feeling this could move towards 1.0486.

However, as we start the week there is a moderate amount of short term uncertainty, potential for a small extension of Dollar strength but if this does occur I don’t really expect it to be by too much. Ideally the 1.0751-60 area in USDCHF should cap… GBPUSD – well, I’d prefer if it rallied directly but I do see a small risk of a dip to 1.6429-53 first.

USDJPY just can’t muster up much support at all. Still, it’s pressing the 94.35 swing low and actually looks as if it will break. There is a slightly lower swing low there also and I can see projections from the short term at around 94.00-10. This now represents my break level. While it holds I have a stronger expectation of a new rally… and this is my preference. If it doesn’t then we’re on our way back to 91.74 initially. Equally, the JPY crosses still look soft in the short term.

AUDUSD topped out nicely – this is also a little ambiguous. I’ll not give up the bullish stance – and what it does first thing this week will dictate whether it retests the 0.8170-80 area first or simply resumes the rally so take care here.

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 (190 pips).

Have a profitable week.
Ian Copsey

Friday, August 14, 2009

The underlying trend is lower but there is risk of early consolidation before this resumes

The Dollar moved lower again all round. The additional losses broke the levels that made the alternative bullish structure and thus we do seem to be left with a fairly distinct bearish structure. The only barrier I could see in the way is a larger consolidation but I’m not sure we really have time for that in terms of the final cycle low area around the end of the month – that’s only 2 weeks away.

So now we have to plan the route. I have to say the losses seen were a lot less aggressive than I had been imagining but they do seem to be developing in a regular manner and should continue to do so. However, we do seem close to an intermediate minor low around 1.4335-61 EURUSD, 1.0638-66 USDCHF and probably 1.6597 GBPUSD. This latter level obviously isn’t a new extreme but this does need a pullback and is in the midst of this and should match with the anticipated Dollar corrective resistance levels in the other two. Once they are seen we can look for the Dollar to resume its decline and retest the lows we saw a couple of weeks ago.

Now, one that didn’t go as planned was USDJPY… It began a rally but then failed… It’s not looking particularly happy with itself either. At this stage I don’t want to get too bearish but that switch isn’t a million pips away. The bigger break level that would cause me concern is at 94.35 and before then I see potential support between 94.64 and 94.85. It will be important to have a reversal confirmed by a reversal pattern here given the surrounding Dollar weakness against the Europeans. Until it does slip I’d still prefer an argument that would take it to 101.43 again…

Given the fact that the JPY crosses also seem to be sagging a bit too much USDJPY weakness does seem likely but do remember the JPY crosses should also be influenced by the expected corrections in the Europeans.

AUDUSD is close to an intermediate peak – the 0.8469-81 area should be the most we see. USDCAD looks pretty mixed so I’m neutral on this today but within a larger bearish structure.

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 (215 pips).

Have a great weekend.
Ian Copsey

Thursday, August 13, 2009

We do need to take care but the stronger indication is for Dollar losses today

Well yesterday did prove interesting. It didn’t all go my way but it was basically close. Of course, as is often the case the market has stalled in a situation where readings could be taken in both ways, in some cases the alternate scenarios bit having wave relationships that could justify extension in either direction.

Given that Dollar cycles are basically bearish against the European currencies I’ll still prefer this side. However, as I did yesterday, I’ll outline both sides in the analyses which should help in identifying what sort of moves would confirm each direction. It’s not impossible that we’ll end up with a stalemate with the Dollar remaining in trading ranges. I doubt it, but the risk is there.

Either way, once the breaks are made it does suggest quite a persistent move so there should be plenty of pips to collect.

I was encouraged even with USDJPY. It did dip just a bit lower than I had expected but the recovery has been firm and does fit in with the Dollar bullish cycles here. In the larger picture I fancy this moving back to the 101.43 high by around the turn of the month but then another reversal lower. I wouldn’t be surprised to see this rally move through to the 98.87 swing high first and after a correction make the next leg higher…

That should keep the JPY crosses really quite strong. I do find yesterday’s recovery from respective lows a little confusing but I feel we should be concentrating on the upside and look for patterns that imply a break higher. Early on today thought I think we need to exercise some care with this group.

AUDUSD dipped solidly but also recovered equally strongly. This tends to bode well for the bullish view here too – though this also fits in with the general view that once this move is complete we should see a much deeper pullback. USDCAD stalled just below the 1.1083 resistance and I fancy this lower also.

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 (230 pips).

Good luck.
Ian Copsey

Wednesday, August 12, 2009

Lack of Dollar gains yesterday threatens a much larger reversal

Yesterday was a wash out really in terms of the analysis. I’m not sure any of the calls were correct but the break levels did seem to be effective. To me, what was more of importance was the fact that the Dollar couldn’t muster up any enthusiasm to continue its rally. It made me take a long look at the daily cycles for the majors and the clear indication is that a significant daily cycle low is due for the Dollar against the Europeans while a cycle high is due for USDJPY. However, if the cycles work true to what I see then it is still in the midst of a final decline into the end of this month and maybe even next.

The next note to make on this is that cycles are approximate and perhaps the lows we saw last week have come a little early. I cannot rule that out but the fact that the Dollar didn’t follow-through lower yesterday does raise certain alarm bells and made me look at the potential alternatives.

Even this morning the Dollar has begun the day looking vulnerable and there are a series of potential reversal patterns lurking which could be the start of another round of losses and probably back towards last week’s lows. A break above the 1.4169 and 1.4184 highs in EURUSD would tend to point to follow-through over time – but still may see a pullback first. Thus, keep both sides of the market in mind but with the growing risk that it will once again be lower.

USDJPY also failed to follow-through higher. This too appears to have a cycle high around 2-4 weeks time and this does seem to match with a move back to the 101.43 high. Yesterday’s decline does therefore seem still to be a correction and I feel that while the 95.75 low may well be enough, there is also risk for follow-through into the 95.31-59 area. However, be aware here also as a new rally does seem imminent.

AUDUSD slipped below the 0.8281 target by just 5 pips and is also supporting the threat of a renewed rally while USDCAD didn’t see the pullback I had preferred but continued the correction high more directly. It’s a little more difficult to identify where this one will stop but yesterday’s high was the bare minimum. I’d prefer to see 1.1083 and 1.1177 seems more comfortable but if the overall Dollar reversal occurs then we could be left waiting so be aware of a reversal lower here too…

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 (30 pips).

Good luck.
Ian Copsey

Tuesday, August 11, 2009

The Dollar should make gains all round today

The Dollar remained underpinned yesterday and there does appear to be potential for the Europeans to be showing a higher level of correlation and I’ll be following a more (Dollar) bullish structure for GBPUSD and USDCHF. I still want to be cautious about these two and will be looking for them to make the right moves over today that demonstrate their unqualified support for the EURUSD led structure.

Indeed, I feel that the small moves we have seen already this morning were probably the lowest we shall see the Dollar over today. Assuming that remains the case then I’ll be looking for quite a solid Dollar rally today – although not in a straight line. Near term barriers are at 1.4060-70 EURUSD, 1.0920-30 USDCHF and 1.6394 GBPUSD and maybe a small risk of 1.6343.

These areas should generate a pullback but not a particularly deep one and then head for the stronger targets at 1.3985 EURUSD, 1.1021-67 USDCHF and 1.6255-65 GBPUSD. From these levels I’ll be looking for a longer lasting correction.

USDJPY was rather lethargic yesterday and is still in the process of a correction lower. I still see this recovering from the 96.60-65 area to renew its rally back to 97.78 initially but then a pullback before it can push higher again. The target here remains around 98.88 at least and may edge above 99.00…

This should keep the JPY crosses fairly subdued and probably retrained into range trading. There does seem some early risk of slippage but if I have any preference then it is for all three to make further headway higher again. However, it may be choppy to begin with until the Dollar rally against the Europeans has completed.

AUDUSD is really bucking the USD trend to a certain extent. It has been dropping but in a very choppy manner and this is more conducive to a corrective pattern and which should find support around 0.8280-00 – at the most 0.8243. USDCAD also seems to be making steady, if erratic gains against it’s U.S. counterpart but I feel today this could be reversed as a correction is due.

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 (25 pips).

Good luck.
Ian Copsey

Monday, August 10, 2009

The Dollar’s upside should still be dominant today

While the report took a break I have kept my eye on the market and with the retracement levels I indicated last week having broken on Friday I am having to adjust my thoughts once again. The first impression was that the 1.4445 high turned the tables implying a complex correction and thus a return to the 1.3747 low. Indeed, it does look an inviting scenario. When I sat down this morning to go through the analysis I still think it possible but just as I was finding the correlation between EURUSD and USDCHF difficult to handle before the same is occurring once again.

However, I can see an alternative scenario for USDCHF but clearly until there has been a little more development in the current move that started on Friday I do feel a certain degree of caution is appropriate. Even when considering GBPUSD I could come up with the same scenario – that is a move back to the 1.5982 low but that is going to require the decline in GBPUSD to be more aggressive than that of EURUSD.

This does, therefore, provide a clue as price development continues and if GBPUSD tends to lag behind and relative support & resistance in the other two begins to break down then it will be necessary to adjust the outlook.

Equally, as the Dollar failed to weaken sufficiently against the Europeans in line with my initial reaction USDJPY rallied stronger than anticipated. I do feel there will be follow-through but there are two resistance areas that we’ll have to watch closely – around 98.20-30 and later 98.88.93 and maximum 99.51. The reactions at those areas, and specifically the initial 98.20-30 should hopefully provide insight to the extent of the next move.

Indeed, also keep in mind the JPY crosses. These still seem to have a little more to go on the topside but it does appear to be limited following which we should be looking for a fairly substantial correction. Now, whether this pullback will be driven by stronger European currencies (and AUDUSD) or by USDJPY is what we then need to watch. I feel it will be a bit of both but I’d like to see the momentum conditions of both sides to get a better feeling for how things will then develop.

AUDUSD and USDCAD are really complex right now. I will be very neutral on these and will be looking for a stronger indication of what is going on. Certainly, I feel that risk should be kept to a minimum on these two…

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

Have a profitable week.
Ian Copsey