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HARMONIC ELLIOTT WAVE

Monday, November 30, 2009

It looks like there is room the Dollar to pullback a little further before extension higher…

It looks as if the market has made up its mind. The Dollar strengthened further over Friday but could not break the last major corrective highs at 1.4801 EURUSD and 1.0222 USDCHF. This is quite normal and I will expect this to break. The only small uncertainty is whether we get any initial range trading or the rally will extend more directly.

I feel that the greater risk is for a fairly swift resumption of the rally which should stop just short of the 1.2646 low EURUSD and the 1.0337 corrective high in USDCHF. These areas are more likely to provide a barrier for a more sustainable and possibly complex correction.

USDJPY appears to have made its low for now. I find the structure just a little messy but more likely to be conducive to a longer choppy pullback higher. The problem I feel we may face is the same start-stop type moves which we suffered after the 88.00 low, thus slow and lengthy with an abundance of range trading.

This should, by and large keep the pressure lower in the JPY crosses but probably with the major moves now over and which should give in to more choppy and less direct moves. Take care with these unless they suddenly display excessive weakness again – but this will probably also mean the downside could come under threat once again…

The only other thing to note is that today is the last day of November and from this point forward the risk of a reduction in liquidity will slowly grow and this is more conducive to rather choppy and erratic trading. It tends to fit into the description I have made above and thus probably the next rally in the Dollar is the most direct move we shall probably see for a while. However, it does tend to lend itself to a more directional move towards the end of the year which I still feel will be Dollar bullish as books are squared up.

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 (-15 pips) and the new review of the support & resistance levels issued in the daily report.

Have a profitable week
Ian Copsey

NEW!! FX-forecaster Trader Package now available at €20.00 pm
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Friday, November 27, 2009

Time to stop watching the pendulum…

Well, that wasn’t as quiet as I had expected…

USDJPY has gone bonkers – but that loss of 88.00 was always the trigger and with the daily cycle low due I feel we may have seen almost all the losses for the moment. However, it’s another wave to tick off on the list. The target is at 84.39 but I have to add that I have found this bearish structure very tough to fit into this target area. Equally, momentum is almost a flat line at extreme oversold so it’s also tough to call for a reversal. Therefore the 84.39 area should be observed closely in case it shows any sign of recovery. Rather startlingly the next target is at 80.80… That seems a bit too low for me but we at least know the boundaries.

Of course this has had its impact on the JPY crosses, all of which have tumbled lower. I am slightly less optimistic of a deep reversal with the Dollar strength likely to add pressure on the crosses.

In the meantime the moves in the Europeans have been tame by comparison. However, the peak at 1.5143 (3 pips below the lower target) and at 0.9909 (8 pips below its target) are perhaps showing potential for the Dollar having reached a final bottom. There are still one or two tricks up the Dollar’s sleeves so we have to be careful but by and large I feel the Dollar should now spend 2 months of rally at least…

The same is reflected in GBPUSD and also AUDUSD which has lost its carry trade luster for now and I feel that overall the larger picture is calling for the Dollar to rally. It may quite possibly be a bit choppy but we’ll have to take it as it comes.

Today’s free analysis is for EURUSD and can be found on
http://www.fx-forecaster.com/DailyForecast.html along with Wednesday’s trade set ups (+0 pips) and the new review of the support & resistance levels issued in the daily report.

Have a great weekend
Ian Copsey

NEW!! FX-forecaster Trader Package now available at €20.00 pm
For MT4 users

Wednesday, November 25, 2009

Now even the pendulum is unsure of which way to swing next…

As tomorrow is Thanksgiving in the States the next report will be on Friday


I mentioned yesterday that time was running out but it seems the battery is low and the Dollar failed to generate any momentum in either direction. However, it did just enough to keep the possibility of a marginal new Dollar low alive… In fact, I feel there is a good chance that the battery will continue to run dry over today and tomorrow if these ranges persist.

If anything, the failure for the Dollar to make stronger headway yesterday has taken the market back into the bullish court. $-hour and hourly momentum see slightly more positive today but this can be wiped out if we get the range trading I fear there will be.

So if we are to see the Dollar make a new low it will probably be on the back of the bulls who have been buying at the USDCHF lows and above 1.5000 EURUSD. We should therefore consider the possibility that these long positions could get taken out to force the Dollar lower to target but I still find it hard to believe it will be anything but that. A quick new low and then a larger reversal as year end profit taking builds up in early December.

That’s something I still cannot get away from – with momentum really not favoring another larger directional move lower over the end of the year…

The JPY crosses, while bearish in the medium term also tend to point to sideways trading over today and tomorrow at least. That continues to mean that either USDJPY is going to manage to break below 88.00 or the Dollar is going to begin its larger recovery and I’ll place my bets on the latter. However, don’t totally ignore the downside risk in USDJPY. Yesterday’s new low was always possible and it still seems like the 88.00 low represents the break – and we could still see another new low… It’s the 88.00 that does seem to hold the key now. I’ll stick my neck out and say I feel the Dollar will rally against the Yen as well now.

So expect a quiet two days…

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 (+50 pips) and the new review of the support & resistance levels issued in the daily report.

Happy Thanksgiving to those in the States…

Good luck
Ian Copsey

NEW!! FX-forecaster Trader Package now available at €20.00 pm
For MT4 users

Tuesday, November 24, 2009

The pendulum keeps swinging… but time is running out

I remember writing some while back that the market seems to enjoy not making decisions. It’s not that the market has a collective mind but more perhaps that the willingness to retain risk is reduced by an undue level of uncertainty. The 1.48-1.50 range in EURUSD has become somewhat of a battleground for diffident bulls and bears…

All the time the pendulum swings from one side to the other. However, each swing marks one more segment of time and I do feel that we are close to a more decisive break. Of course, the million Dollar question is “which way?” Well, currently there has been no break in the weekly downtrend and frankly the break in trend as measured by key swing levels is hard to identify. The daily downtrend is clearer with the 1.4626 EURUSD and 1.0337 USDCHF Dollar highs providing those breaks.

I also think the JPY crosses should soon start falling again but whether this will be driven by a weak USDJPY or a strong Dollar-Europe is the key question. For those of you who have seen the weekend wrap on
http://www.fx-forecaster.com/files/Daily_Support_Resistance_20th_November_2009.pdf you will see that I feel that while the weekly Equilibrium Clouds are quickly catching up with price action and daily is oscillating around its own Cloud it still does not rule out a marginal new low.

So the uncertainty is still quite strong. From my own method of projections we have come close to, but not quite reached minimum targets at 1.5146 EURUSD and 0.9932-63 USDCHF. If my measurements are correct then even if the Dollar does dip there is very little downside left. With end year coming and the probable need to pare positions and book profits could also be a determining factor but quite when that will begin is not 100% clear.

So… we have the two sides of the coin… Flip it and see what we get…

However, so far the retracements we saw yesterday stalled around the right areas to be part of a large complex correction. I think key areas to watch fro are probably around 1.4900-25 EURUSD and 1.0138 USDCHF… Much beyond and the pendulum will be swing back to Dollar bullish… However, I’m not convinced it will swing back any more after this…

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 (+45 pips) and the new review of the support & resistance levels issued in the daily report.

Good luck
Ian Copsey

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Monday, November 23, 2009

The pendulum keeps swinging…

Just as it looked like the haze was beginning to dissipate the autumn breeze shifted and carried the haze back to settle over the low lying land… It may still be shrouding the short term picture but the horizon still remains visible I still feel this will turn into Dollar gains.

In the process though the pendulum has reversed back to bearish but it’s becoming tough to firmly hold either short term view until the break becomes a sustainable one. When I looked at the longer term charts the weekly trend remains in place – but the daily trend has slowed to an extent that it will take very little to see the Dollar begin its ascent.

One additional clue on Friday was GBPUSD which broke below the 1.6496-14 targeted support. The low at 1.6459 was not a million miles below but it sure doesn’t look as positive as it did on Friday.

The week has begun with the market taking advantage of the high Dollar and has made the first move this week a negative one. I want to say that it won’t go too far. The problem I see when I look across the European currencies is correlation. Yes, they are all moving up and down at the same time but to differing degrees and when trying to correlate the structure the subtle differences between them makes for some head scratching and quizzical expressions.

Clues we can look for may well be in the JPY crosses which do seem to require a bit of a pullback higher. Now, this can be generated by a rally in USDJPY or Dollar losses against the Europeans. Well, USDJPY is still not really showing much sign of doing anything but flapping about in ever decreasing ranges, still holding above critical supports but not really displaying any strength. I think it’s due at some point over the week but until it moves above key resistance I’d prefer to remain neutral.

Hence this places the emphasis on Dollar weakness… However, unless we get substantial weakness the pendulum will probably retain its constancy of swing… but to see new Dollar lows we’re going to have to clear the sequence of higher lows … once this occurs we can begin to consider a larger marginal new low before reversal… On the same sentiment, if it doesn’t manage this then the Dollar upside beckons…

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 (+60 pips) and the new review of the support & resistance levels issued in the daily report.

Have a profitable week
Ian Copsey

NEW!! FX-forecaster Trader Package now available at €20.00 pm
For MT4 users

Friday, November 20, 2009

Today will probably be mostly range trading – but possibly setting up the final decline

After Tuesday’s & Wednesday’s reports I hope yesterday made up for those dreadful calls. I feel much happier that we appear to be coming back to a semblance of normality. However, the first Dollar resistances basically held and this morning the trip above 1.4927 EURUSD and below 1.0126 USDCHF are tending to point toward a day of range trading and probably later in the day seeing the Dollar dip a little lower in this range. My estimates for the ranges in these two are 1.4870-1.4960 EURUSD and 1.0095-1.0166 USDCHF.

Now, while these range limits look good for the continental European pair I’m not quite so convinced that we’ll see the same in GBPUSD. Here I feel we can see a drop below yesterday’s 1.6606 low with the target I mentioned yesterday at 1.6496-1.6514 still expected to be seen and should provide a firm base.

Now if all this develops as I expect… guess what? It will imply Dollar losses into those weekly targets I have repeated many times over the past few weeks. Well, that should be a story for next week. There is the chance that we may just see the end of the range trading in the other two Europeans as well which could – and should – end up with a push back lower for the Dollar but I’m not sure there’s enough time to see this press through today.

Elsewhere USDJPY actually dipped yesterday and puts the structure in a position that could lead to further gains but it’s one of those ambiguous pivotal points where it could go either way. However, even in the bearish scenario it should still mean we’ll see a retest of the 89.53 high again – it’s what happens from that point which seals the deal for one of the alternatives. Well, we should allow for a small overshoot above 89.53 but no more than 89.70. If it remains below then we should see one more 3 legged move lower but still see it end up above 88.00 for the next rally. If not – then next week is going to be frenetic… probably feel the wind brush past your ears as a cycle low is due and there’s probably 400 pips to the next major target on the downside…

AUDUSD has either seen its low – or perhaps see a minor new one – but the bigger picture still seems to suggest the upside beckons. The market doesn’t give up on a bullish Aussie picture too quickly… The interest differentials still can bring home some useful pips before Xmas…

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 (+38 pips) and the new review of the support & resistance levels issued in the daily report.

Have a great weekend
Ian Copsey

NEW!! FX-forecaster Trader Package now available at €20.00 pm
For MT4 users

Thursday, November 19, 2009

I’m ready to have my neck cut off again… but I think the Dollar goes straight back up…

The past two days I have provided some quite horrendous calls… I can only offer my apologies. When I look at this type of price behavior (in EURUSD and USDCHF) I see a greater tendency, more frequently than not, for it to be corrective. Indeed, it has the characteristics of a possible large triangle. Well, it’s far too early to be absolutely certain and thus we’re going to have to take this step by step. It has been a crazy move and much of it quite reactive, having the look of a market that is seeing bulls and bears slugging it out.

There are a couple of reasons why I have been pushed towards this Dollar bullish view. Firstly the break down in GBPUSD below 1.6729 really doesn’t support continuation of an upward move. The implied result appears to be a move back to the 1.6496-1.6514 area. That’s quite a large drop and within a larger triangle structure in the continental Europeans this type of move would also be implied…

So today will be very much a defensive structured analysis though I’ll hang my hat on the Dollar bull side for now but do not be too surprised if the volatility continues. However, there is some minor risk of a short blip lower early in the day. I prefer a more direct bullish scenario but we should cover the rear-guard.

I also see AUDUSD looking bearish too – and what’s more the JPY crosses and these look more to be driven by Dollar strength against the Europeans/Aussie than USDJPY. I am mildly bullish for USDJPY in the short term and probably medium term but I still can’t rule out one more dip below 88.72 but probably remaining above 88.35-45. This could happen on one of the pullback in the Europeans. There does seem to be a cycle low in USDJPY next week but I’m not super bullish here. More I see a minimum of 92.89 and maximum 94.04 over the coming 2 months.

So, I suggest we start the day with this awareness but let the market conform this call. If it begins to play through then we should have plenty of opportunities to take advantage of the expected rally.

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 (+70 pips) and the new review of the support & resistance levels issued in the daily report.

Good luck
Ian Copsey

NEW!! FX-forecaster Trader Package now available at €20.00 pm
For MT4 users

Wednesday, November 18, 2009

Further Dollar gains should be seen today but take care at 1.4732-62 EUR and 1.0266 CHF

Ouch… that was not a good day yesterday... The easiest interpretation of the Dollar’s rally yesterday is to get very bullish. Well, I am basically bullish in the medium term and always have been, but it’s the navigation of the lows that has been rather messy.

Now why would I have any reservation over a direct Dollar rally? Well, as much as EURUSD and USDCHF saw strong moves, and to a certain extent AUDUSD as well, the Dollar strength wasn’t uniform. GBPUSD hardly showed much enthusiasm and while AUDUSD did drop it still has hurdles to overcome. I’ll be using these two pairs to identify whether this is THE Dollar reversal or is just another spoof in an alternative corrective structure. We’ve already been whipsawed a couple of time in this and I feel we should just be aware of the areas that could have the potential to do so again…

That said, I still think the Dollar will make a follow-through push higher today. We’re quite close to support levels that should hold and trigger another rally and it’s the 1.4732-62 EURUSD and 1.0266 USDCHF areas that need to be watched closely. Along with this is support in AUDUSD at 0.9191-06 and in GBPUSD at 1.6729-51.

I will expect a reaction from around those areas and the manner and extent of the reaction that will provide us with the clues we need.

Meanwhile USDJPY didn’t even reach my 88.63 support and instead has pushed higher. It’s encouraging and if I have any preference then it is still for continued gains but I’m not yet convinced that this is anything more than a correction. I am being pulled more towards the view that we’ll see another new low but I’m not yet convinced this will be below the 88.00 low… For me the 88.00-90.60 range is key here.

That should probably leave the JPY crosses looking a bit soft – though GBPJPY has been more supported through the relative firmness in GBPUSD and this may well continue. The crosses may well still be in a similar situation to USDJPY in seeing a choppy corrective move lower but the longer we see USDJPY fail to break below 88.00 it seems as if any weakness is going to have to be driven by the other side of the currency equations – in EURUSD, GBPUSD and AUDUSD…

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 (+0 pips) and the new review of the support & resistance levels issued in the daily report.

Good luck
Ian Copsey

NEW!! FX-forecaster Trader Package now available at €20.00 pm
For MT4 users

Tuesday, November 17, 2009

There seems to be a risk that we could see Dollar losses directly – but take care around the lows

Yesterday was mostly successful, the Dollar lows identified quite well in three of the four majors (excluding GBPUSD) and the high in AUDUSD. The only thing that has me wondering is the sharp recovery from initial lows and the rush to marginal new ones… Several different scenarios can be generated from this and interestingly one of them is direct losses to the major weekly targets. This latter scenario which was not high on my list of preferences yesterday has come about through the strength of GBPUSD and also AUDUSD.

However, if we do see direct follow-through it would limit the EURUSD target to the 1.5146 area while 0.9932 USDCHF is implied and probably a retest of the 1.7041 high in GBPUSD.

It’s food for thought and can’t be ignored but nor should the Dollar bullish side as well. I think I probably favor the downside now, but there are clear breaks to prove this wrong and we have to remember that the market has been quite erratic over the past week and thus it wouldn’t take too much for another sharp reaction.

USDJPY developed as expected yesterday and I’d like to think that for now the larger downside threat may have abated. However, always keep your eye over your shoulder for a drop below 88.46-63 which could begin to tip the weight too far in favor of the downside – and when this breaks it should be quite strong I feel. My preference here is for a choppy recovery but I can’t see any strong signs of excessive strength just yet.

That is all reflected in the JPY crosses also which are going nowhere very fast… The consolidation has become so much of a mess it is really difficult to judge what the next move will be and I feel we’ll have to be very careful here. I’d prefer just to let them rest for now and wait for more definitive signs from the majors first.

AUDUSD still look bullish and has support between 0.9284 & 0.9307. The target appears to be around 0.9499. USDCAD is also a currency that is busy going nowhere and much like the JPY crosses we need some catalyst to break it from the corrective price action we have been seeing.

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 (+85 pips) and the new review of the support & resistance levels issued in the daily report.

Good luck
Ian Copsey

NEW!! FX-forecaster Trader Package now available at €20.00 pm
For MT4 users

Monday, November 16, 2009

The market returns into an area that keeps both bullish & bearish scenarios alive…

The Dollar is beginning to resemble a rollercoaster… The depth of the pullback higher was very deep – deep enough to signal a reversal on the vast majority of occasions. However, this morning it has opened weaker with the losses really not consistent with a stronger Dollar. So we are left standing between two scenarios and neither really appears that convincing.

It does open possible alternatives. If I look at the Dollar move higher as a complete correction it really has to stretch to reach the downside targets I have been considering, though it could come close to weekly targets. It is therefore possible that we may see a sideways consolidation develop which will mean that at least half the week is going to be unpleasantly erratic and choppy. I’ll list down the break level that would imply each within the individual analyses and until there is a clear signal in one direction it will be best to remain cautious.

Even USDJPY is not exactly how I’d expect in the extreme bearish scenario I have been cautiously regarding. If this is to turn very bearish then we’ll need to test the 88.00 low today preferably ay a stretch tomorrow. However, in the meantime we’re going to have to be careful around the 88.63-91 area. If this hold we could revert back into the recent range again. This latter scenario wouldn’t rule out another low but we may have to accept that until the 88.00 low breaks that we may just be seeing a deep correction to the rally from 88.00 to 82.31…

If the 88.00 level breaks then the game is over with the next major target at 84.39.

Even the JPY crosses have been reticent to state their direction clearly, the last week really having provided a big messy consolidation. Obviously we’re going to need this to break decisively – and in tandem with USDJPY … probably. The threat from a stronger Dollar against the Europeans appears to have abated but if this resumes there could even be a threat from this. However, this will need a break above the Dollar highs at 1.4825 EUR and 1.0193 CHF.

So we’re still at a stage where we have to be aware of both sides of the story but I suspect that by the end of today or tomorrow we’ll hopefully have a clearer picture…

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 (+144 pips) and the new review of the support & resistance levels issued in the daily report.

Have a profitable week
Ian Copsey

NEW!! FX-forecaster Trader Package now available at €20.00 pm
For MT4 users

Friday, November 13, 2009

It certainly looks like the 1.52 and 0.9932 targets will not even be approached…

Obviously I didn’t expect that reaction in the Dollar… The rally has gone far enough to pretty much confirm that we shall not see the targets for which I had been patiently awaiting… If I wanted to be desperate perhaps I could concoct an argument that we’ll now see a triangle and from the end of that we move to those targets but I can’t even see that happening to be honest.

And that means I have to lick my wounds and treat this decline merely as a deep correction. The interesting point about this is that on the assumption that we now see a Dollar rally beyond the highs at 1.4626 EURUSD and 1.0337 USDCHF they will both form (Dollar) double bottoms with the targets being very close to where I would expect this correction to stall…

However, from what I have seen so far I can’t see this move being totally direct. I have to think in terms of projections, targets and how structures will fit into this and from what I think I see we may not get much beyond the highs in the last rally… It will also mean that we should see quite a direct move with shallow pullbacks. Thus, if price begins to deviate from this scenario it will suggest some other, more complicated structure and I’ll need more development to be able to judge what that may be. Thus, for now I’ll remain pretty directly bullish but if you see any deeper pullbacks than I suggest in the analysis take care…

The other move of note was the sudden rush above 90.25 USDJPY. This has certainly lifted some of the doom and gloom surrounding it and I’d like to think it can carry on rallying. To really confirm this we’ll need it to push above the 91.61 high which is obviously still some way higher. The thing that concerns is that of late USDJPY has been almost perfectly displaying negative correlation with USDCHF… So it’s not quite out of trouble but while 89.29-63 holds the chance for gains remains…

That the JPY crosses still don’t look particularly healthy is a little less relevant given what should be Dollar strength against the Europeans at a faster pace than against the Yen. The structures in the crosses are exceptionally erratic right now and may well continue a little longer though I have a more bearish view on these.

Thus, today should really favor a stronger Dollar all round but do take note of the key supports…

Today’s free analysis is for GBPUSD and can be found on
http://www.fx-forecaster.com/DailyForecast.html along with Tuesday’s trade set ups (+70 pips) and the new review of the support & resistance levels issued in the daily report.

Have a great weekend
Ian Copsey

NEW!! FX-forecaster Trader Package now available at €20.00 pm
For MT4 users

Thursday, November 12, 2009

We should see the final Dollar declines to 1.5200-15 and 0.9917-32 by tomorrow…

So far so good, though the route has not been 100% what I had anticipated but given the ambiguity earlier in the structures it has been close enough. I feel that yesterday’s moves look closer to being a complex correction and this should imply that we’re moving directly to target…

At these early stages when there really isn’t any price confirmation it is prudent to approach this carefully just in case an alternate structure develops but overall I still feel that in EURUSD there is little risk of loss below 1.4916 before the final rally.

A bigger surprise came from GBPUSD which suffered a sizeable drop. This does bring an aura of completion to the rally and even while EURUSD should rally to target I can’t now see GBPUSD matching that feat. I’m more tempted to suggest that we could be seeing a dead cat bounce. Given the expectation of Dollar weakness in general I feel it may well be better to hold off from any substantial position here until the Dollar lows are seen just to see how GBPUSD develops. For now I feel that the stronger indications are in the other two Europeans.

USDJPY also dipped below 89.61 but hasn’t yet broken below the 89.18 low… It hasn’t been particularly forceful about the recovery and therefore the larger downside risk remains. Make no mistake... If this makes another break lower through 89.18 and 88.60-70 the outlook is very, very bearish. The only hope it has now of generating enough momentum to force a stronger push higher is a break above the 90.25 and 90.84 swing highs…

The position is compounded by the repeated lack of power in the crosses to push above the recent highs – with perhaps the exception of AUDJPY but this is being driven more by AUDUSD… The structures in both EURJPY and GBPJPY have become exceptionally complex and really it will be best to wait for a stronger break to bring clarity. However, the clouds are grey here too and it won’t take too much to see these take a tumble also…

The next barrier for AUDUSD in its renewed life is around the 0.9402 area with final potential to 0.9483-0.9513 minimum and an outside chance if it becomes more aggressive at 0.9662… However, a high is expected here as well…

Today’s free analysis is for USDJPY and can be found on
http://www.fx-forecaster.com/DailyForecast.html along with Tuesday’s trade set ups (+0 pips) and the new review of the support & resistance levels issued in the daily report.

Good luck
Ian Copsey

NEW!! FX-forecaster Trader Package now available at €20.00 pm
For MT4 users

Tuesday, November 10, 2009

Now we can plan the route to the 1.52 and 0.9932 targets…

With tomorrow being Veterans Day Holiday in the U.S. the next report will be on Thursday

There was no way the Dollar could spend yet another day wondering what to do… The break lower is in line with the preference I always had – not that I didn’t begin to doubt on several occasions – and now generates targets at 1.5200-06 EURUSD and around 0.9917-32 USDCHF. Of course, this is unlikely to be a straight line and at some point I anticipate a fairly sizeable correction and probably starting later today or tomorrow.

Actually, today should start with a correction also but I don’t think this is going to be too deep. Just considering EURUSD we have a “choice” of two areas. The one I am looking at is around 1.4951 and if this holds then we can probably expect a rally to 1.5061-69 only and then the larger pullback. If today’s pullback becomes deeper – to around 1.4906-26 then I’d have to consider the risk that this is the larger pullback occurring sooner. If so then the next rally should end up at the 1.52 target.

That really highlights the potential routes to target so be aware of these and how to take advantage… For the moment I’m sticking with a 1.4951 base and 1.5069 target.

One currency to watch carefully today is USDJPY. This hardly set the world on fire with the rally to 90.25… It is struggling and really needs to pick up some confidence to push above 90.25 to avoid what could be a sharp and nasty drop into the void. In terms of the larger picture I have always preferred a second move higher and if it can manage a push above 90.25 then I’ll be looking out for 90.84 initially and potentially 91.61. This would imply a minimum upside target at 92.89.

It’s a break below 89.61 that now concerns. If this occurs then don’t be surprised to see a sharp drop to 88.00 again. It should cause a pullback but then the next target is down around the 86.93-87.10 area. However, while it can cause a correction the larger implication is actually much lower – at 85.73 and 84.39. I still prefer the upside but it’s worth noting the implication of the alternative if I am proven wrong…

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 (+155 pips) and the new review of the support & resistance levels issued in the daily report.

Good luck
Ian Copsey

NEW!! FX-forecaster Trader Package now available at €20.00 pm
For MT4 users

Monday, November 9, 2009

The Dollar must surely break out of its range today…

Even with the U.S. Non Farm Payrolls number the Dollar still failed to break the tight ranges seen against the Euro and Swiss Franc while volatility continued against the British Pound. How long can this status quo remain? How long can the rabbit stand in the road and not get hit…?

I’m pretty confident that today will see an extension one way or the other. When I first looked at the charts before today’s open I began to shift away from the Dollar bearish side to the bullish. However, the initial losses seen in the Dollar, while not actually making that final break it brings back the potential for continued range trading for at least the first part of the day.

Overall, it looks like a break of the 1.4808-1.4916 EURUSD and 1.0125-1.0202 ranges will most likely seal the direction and with GBPUSD pressing towards the 1.6692 high my underlying Dollar bearish preference may well come to fruition. Let’s see just how they go, but in the larger picture this still should not extend much beyond the recent lows at 1.0032 USDCHF and 1.5061 EURUSD…

The drop in USDJPY was pretty firm and I had indicated on Friday that this may well mean the end of the end. Having looked again I fear that I may have failed to recognize one alternative. The low at 89.61 was almost an exact wave equality target of the prior decline from 91.26 and that means we should also consider the possibility that all we’ve seen is a deeper correction. However, if Friday’s low breaks followed by the 89.18 low it won’t look at all healthy…

Given the bounce in the JPY crosses it looks as if we shall see USDJPY rally and potentially along with EURUSD since any break above last week’s highs is going to look pretty bullish – and more than I had considered before. It really looks as if we’re going to have to watch the entire combination of straight Dollar-currency pairs along with these crosses.

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 (+30 pips) and the new review of the support & resistance levels issued in the daily report.

Have a profitable week
Ian Copsey

NEW!! FX-forecaster Trader Package now available at €20.00 pm
For MT4 users

Friday, November 6, 2009

The Dollar has edged towards the downside – just a little more confirmation required

The status quo remains. This state of balance between the bullish and bearish scenarios remains with limited movement yesterday more reflective of the market collective indecision as it stands like a rabbit staring into headlights both in front of him and behind…

If there was any swaying towards the bearish side then it was ever so slight as EURUSD managed to extend its rally by a very unpersuasive 9 pips although GBP proudly tried to out-do its Euro-zone compatriots by extending gains to the 1.6633 resistance.

So we’re left in the middle and pretty much with the same break levels as outlined yesterday. The downside still attracts me slightly more due to the desire to have a Dollar bullish reversal confirmed more thoroughly than it did on the last dip to 1.5061 EURUSD and 1.0032 USDCHF. The only thing I find slightly bothersome about that is it would appear to imply that GBPUSD must break above 1.6738 and I didn’t really have that in mind. Of course, this assumes that it won’t go walkabouts all by itself again. However, while momentum is beginning to lull into consolidation mode, basically it does look more biased towards the Dollar bearish side.

Maybe the JPY crosses hold some clues as these certainly don’t have the look of making a high at the moment. It is possible this is driven by a strong USDJPY but if both EURUSD rallies along with USDJPY the implication is quite obvious. Although it’s not a certain link I feel it will be worth watching the crosses for any idea of what will break and when.

For USDJPY itself, well, upward progress is upward progress and until that stalls it dies seem to be the dominant short term direction and I can’t see any obvious signs of reversal from momentum indicators yet. It may be limited by 91.35-55 today but even that is positive in the overall scheme of things and tentatively this would make it quite bullish for a minimum test of 82.89.

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 (+75 pips) and the new review of the support & resistance levels issued in the daily report.

Have a great weekend
Ian Copsey

NEW!! FX-forecaster Trader Package now available at €20.00 pm
For MT4 users

Thursday, November 5, 2009

Dollar reaches pivotal areas between bullish & bearish

It’s amazing how sometimes when there is a decision to be made between bullish & bearish the market appears to have a collective mind … but avoids the decision for as long as it can. We have had a pretty deep recovery in the Dollar, very close to confirming a larger reversal higher but not quite enough to tip the odds in favour of continued strength. Equally, I recognized the risk of the moves which we saw in the European currencies... and just a little more than I had though … but not quite enough to push the Dollar back over the bearish cliff.

This does happen quite frequently in many time frames and it’s just a bit frustrating not being able to state with any total confidence what will happen next. However, the benefit of these instances is that we have some fairly good levels that confirm - or deny – both bullish and bearish structures.

If I have any preference it is still for Dollar losses merely from the perspective that it failed to really provide any technical evidence of completion and reversal in the downtrend. What’s more it didn’t reach targets. However, there is no rule that dictates that it should. It just so happens that probably 9 times out of 10 it does do this.

So I’ll hang my hat ever so cautiously on the bearish hook but knowingly looking over my shoulder at the alternative. If you are talking risk and reward then the Dollar bullish side has far more to go – possibly to 1.40-1.42 EURUSD while the downside target lies at a relatively closer 1.52 EURUSD.

So bear this in mind as we start the day and be aware of the break levels I’ll outline in the analysis.

Elsewhere, USDJPY had a positive day and I’m happy with the call. Directionally it seems headed higher but I do find the structure of the rally less than convincing. Therefore we still need to take care…

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 (+0 pips) and the new review of the support & resistance levels issued in the daily report.

Good luck
Ian Copsey

NEW!! FX-forecaster Trader Package now available at €20.00 pm
For MT4 users

Wednesday, November 4, 2009

The Dollar is a step closer to confirming a sustainable correction

I was right when I stated that the market wasn’t ready to commit to the Dollar downside. The gains seen yesterday took it another step towards a more sustainable correction but the Dollar hasn’t quite yet undeniably made a break higher. Actually, if anything in terms of where I have felt the major lows should have developed, yesterday’s moves have provided a structure that actually fits those targets quite well.

If I have felt any strong conviction to anything this morning it is that we should see extension of the losses from yesterday’s highs back to the recent corrective lows at 1.4857 EURUSD and 1.0155 USDCHF. Indeed, considering GBPUSD hardly blinked an eyelid and remained above its own lows it does seem to support this.

However, there is no denying that there is considerable underlying support now for the Dollar and if we are to see extension of the downside to new lows we’re going to have to press through those corrective lows over the next day or two to raise that scenario again. Until that point I feel we’re going to have to take the first step as it comes.

USDJPY, almost uncharacteristically, decided not to develop in perfect negative correlation with Dollar-Europe… This too is poised between the upside and downside. The fact that it pulled back lower is perhaps tips it in favour of the upside but we’re going to have to still use caution until this finally confirms its intentions.

I have a mild preference for the upside in the JPY crosses as well, and that would tend to point to a firm EURUSD and possibly USDJPY also. Still, there has been some disconnection between various pairs recently which have confused the larger picture so the story remains one of caution.

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 (+40 pips) and the new review of the support & resistance levels issued in the daily report.

Good luck
Ian Copsey

NEW!! FX-forecaster Trader Package now available at €20.00 pm
For MT4 users

Tuesday, November 3, 2009

The market doesn’t seem ready to commit to the Dollar’s downside – range trading expected

The Dollar did press lower against the Europeans and stalled just short of the lows seen last Thursday. However, the correction from there has been rather deep and this perhaps implies that the market is not yet willing to commit to a lower Dollar at this point. This also seems to be mirrored in USDJPY which recovered but failed to penetrate the 90.48-80 resistance.

The implication as far as I can see is for continued consolidation today but I don’t think it will last beyond tomorrow. It of course raises the unwanted result that dual wave counts are therefore being generated which is quite normal at these stages and itself is a reflection of uncertainty by the market.

Thus today should be a day to play the ranges and be aware of where support & resistance should develop. If I look at the JPY crosses they do still seem to have a general bullish outlook for the day, although within the boundaries of a possible correction. This is a situation to watch carefully since if I have any real concerns it is about the Yen.

Failure to break above the 92.52 high keeps the swing highs declining so a drop below 88.00 is going to look pretty bearish and by this I mean 86.35 at least and I wouldn’t then be surprised to see 84.39. I have always felt it was a little too early to break lower since we still have over 2 years of bearish monthly cycles. Therefore, this is still a tentative outlook but one to keep in the back of your mind.

So then we have to see how the Dollar manages against the Europeans too. Just to repeat, my preference is for one more decline but I wouldn’t want to fight against a rally that pushes above 1.0312-58 USDCHF or below 1.4671-82 EURUSD… GBPUSD is also mapping out what appears to be a triangle and we have to see which way this breaks.

Thus, in summary for today, basically take profit when seen when within the consolidation range. Only look for a stronger move on the break of the extremes of the range.

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 (+0 pips) and the new review of the support & resistance levels issued in the daily report.

NEW!! FX-forecaster Trader Package now available at €20.00 pm

Good luck
Ian Copsey

Monday, November 2, 2009

Bearish Dollar is still the preference but we can’t forget that a substantial correction is due

Well, Friday was an interesting day. I had identified that all was not well with the decline in the Dollar versus the Euro and Swiss Franc while I wasn’t that happy either with the rally in USDJPY… I favored an alternative corrective structure and got it totally wrong.

Now, as way of background, I feel I should start with the larger picture in which I still feel that the biggest risk is for a larger correction higher in the Dollar. This doesn’t totally rule out one more decline though. There were no Dollar bullish divergences at the recent lows. It’s not a rule that there should be, but they appear more often than not. We didn’t reach targets either and that is what is pushing me towards the preference that we’ll still see one more drop in the Dollar.

Given we have just switched over into November so that we have basically another 6-7 weeks left of meaningful trading this year, the potential for a new low, possibly a slow choppy decline into the second half of the month, would set up position squaring going into year end. Well, it is one possible scenario but I wouldn’t want the Dollar to rally any more than 1.4570-1.4650 EURUSD and 1.0358 USDCHF… Even then I find that stretching the limits slightly…

USDJPY was also dumped as if it was toxic waste and we’re going to need this back above the 90.50-80 area to bring any chance of a second (and probably final) rally above 92.31… I am eyeing the crosses here which also look quite vulnerable so I’m slightly more concerned on this front. If we see losses much below 89.02-07 (max 88.75) I’ll be considering a much more bearish outlook…

The only potential sign I get from momentum is in the 4-hour charts which are showing the early stages of a Dollar bearish divergence (bullish in USDJPY) but overall momentum is still pointing lower and we need this to flatten out and preferably begin to recover in case there is one more attempt at follow-through to Friday’s move by Europe later on…

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 (+80 pips) and the new review of the support & resistance levels issued in the daily report.

Have a profitable week
Ian Copsey