Friday, September 18, 2009

GBPUSD topped out yesterday… today sees EURUSD and USDCHF reverse…

I have to say that EURUSD and USDCHF are driving me crazy… or perhaps more accurately even more crazy… These final stages in the Dollar decline have produced the most bizarre twists and turns in the structure that it is hard to try and keep up with how it changes. However, the final analysis remains the same. We are within a whisker of seeing a major reversal in the Dollar and I really don’t need to change the final stalling targets – it’s just the construction of that decline which is very, very complex.

I should perhaps add a caveat. GBPUSD, after valiantly attempting an impression of a decent correction, finally gave up the fight. Here the downside looms and it would not surprise me to see the move eventually reach 1.6113 and even then it will be for a brief correction. The caveat I should raise is that maybe we have to consider that its European compatriots also found there extremes and actually we’ll see the Dollar rally from here. I doubt it, but it is something to keep in mind as we get so close to the turning point.

USDJPY still has me wondering. I dearly want to stick to a bearish stance. However the crosses are providing a small warning. GBPJPY is bearish but this could well be more a reflection of GBPUSD rather than USDJPY… The warning we need to note is the growing evidence that EURJPY and AUDJPY may have a little more to go on the upside. It’s touch and go and I’ll take a neutral view overall and let the price movement over today push me one way of the other. However, if the Europeans are about to turn we can’t rule out strength in USDJPY. Wait and watch here. Another thing to note here is that Japan has developed an alternative to Golden Week … From Monday to Wednesday next week there is a bank holiday here and this has been dubbed as Silver Weekend. We can’t expect too much to come from these shores to move USDJPY…

Finally, AUDUSD still seems to have potential for one poke higher and USDCAD one last poke lower so these are falling into line with the general expectation of a Dollar reversal.

Take care again today, sell into GBPUSD rallies.

Today’s free analysis is for GBPJPY and can be found on along with yesterday’s trade set ups (5 pips plus one open position).

Have a great weekend.
Ian Copsey

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