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 along with Yesterday’s trade set ups 30 pips).

Good luck.
Ian Copsey

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