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HARMONIC ELLIOTT WAVE

Wednesday, December 23, 2009

As long as yesterday’s highs remain intact we’re more likely to see range trading today

Please note that this is the last report for the year and will return
on the first trading day of 2010 on 4th January.


The Dollar managed to break its high against the Euro to reach 1.4217. It wasn’t quite where I expected but the failure for USDCHF to push to new highs is a warning that today could see a slow grind lower but to remain in the last few day’s range. I guess it should hardly come as a surprise since this is effectively the last trading day of the year. While there will still be services over the 24th the interest in taking positions in rapidly swindling liquidity is not conducive to position taking when there may not be a good enough market to exit that risk.

If I’m wrong and EURUSD pushes below 1.4217 and USDCHF above 1.0506 then we could see a sharp spike high in the Dollar as traders play pass the parcel only the game is to not hold the parcel when the music stops…

I shall concentrate here on a few comments for next week’s trading which, assuming we get the range trading today, should see the Dollar continue its move higher directly. There is one target area at 1.4123 EURUSD and in USDCHF at 1.0548-74. If these break then look for 1.4014 EURUSD and 1.0667 USDCHF… GBPUSD also looks soft.

On USDJPY, the break above 91.69-74 indicates the next stalling area at 92.32-69. Actually, this could be seen today but once seen the risk is then for a correction lower. Thus the JPY crosses would see some strength also.

AUDUSD looks soft while USDCAD remains in its sideways trading range and doesn’t look to break out for some time yet…

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 (- 17 pips with open trade) and the new review of the support & resistance levels issued in the daily report and FX-forecaster Trader Package.

May I extend my very best wishes for a Merry Christmas and a healthy, peaceful and profitable 2010

Ian Copsey

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

Tuesday, December 22, 2009

Liquidity is low and if the Dollar highs are broken there is risk of significant follow-through…

Please note that The Daily Forecaster will take a break from 24th December
and will return on the first trading day of the year on 4th January.


That was a pretty messy day... The real risk is still the decreasing market liquidity. Yesterday’s price action demonstrates that through the swings that saw little in the way of corrections and keeping to relatively tight ranges but with a general lack of will to push the limits that would take the Dollar more strongly in one or other directions.

Perhaps USDJPY was the exception and moved in line with my expectations and I still feel there is a little more to go before the next pullback. That can’t be much of a surprise at this stage with just today & tomorrow providing any semblance of normality. Thursday will no doubt see half days in many centers and more willingness to stretch lunch hours and do the last minute shopping…

Certainly the market doesn’t seem to have an appetite for short Dollar positions and as we approach last week’s highs there is risk we could see follow-through. I’m not sure how much we can trust momentum indicators at this point as it’s not really a “normal” market. However, the general pattern of things at this time of year is either to settle into comfortable tight ranges… or we see a steady trend in one direction.

If the highs are breached I can point to resistance levels at 1.4230 EURUSD, then way lower at 1.4123 and if this becomes a stretched move then at 1.4014. This would probably equate to moves to 1.0548-52 USDCHF and on the larger target then 1.0667-74…

As a guideline the JPY crosses look a tad on the soft side but could still see minor gains before a bout of weakness. It reflects a firmer USDJPY which I still see reaching 91.69-74 and then much depends on whether we see breaks of Dollar resistance levels against the Europeans.

The Aussie still appears to have a little way to go on the downside while USDCAD appears to have moved back into range so will remain locked in rather erratic and messy trading conditions.

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 (+35 pips with open trade) and the new review of the support & resistance levels issued in the daily report and FX-forecaster Trader Package.

Good luck
Ian Copsey

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

For MT4 users

Monday, December 21, 2009

I can’t totally rule out one more attempt higher but I do feel that a modest correction should develop …

That early volatility on Friday morning made it tough to provide decent support & resistance as the structure was changing pretty quickly while I was writing the report. Overall I do feel that we should now see a day or two of consolidation but a return to Friday’s Dollar highs should occur – and probably later this week.

The slight doubt I have in my mind is drawn from the fact that the 5 minute FX-f RSI didn’t provide any obvious signs of reversal although hourly charts are showing Dollar bearish divergences. However, we really can’t see any deeper pullback that that seen already or it will tips the scales more firmly towards the correction. If anything I do feel that it is time for a correction.

Already I have found that projections are becoming less accurate, corrections very shallow – or very deep which is causing some confusion over whether intermediate waves have completed. There is no way it will get better this week which effectively only has 3 days of near-normal trading. This means we should remain cautious on trades and make sure that set ups are followed.

One picture I do see that appears to be stronger is that in USDJPY. It must remain above 90.06-20 but the upside prospects are good for 91.69-74 over today – max tomorrow – but then expect a pullback before following through next week.

In turn this should maintain the firmness of the JPY crosses all of which have bullish biases…

Take care with trades… take profits early.

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 (-30 pips with open trade) and the new review of the support & resistance levels issued in the daily report and FX-forecaster Trader Package.

Have a profitable week
Ian Copsey

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

Friday, December 18, 2009

The Dollar has completed the rally yet but this morning’s craziness could generate a sideways consolidation

In the end it happened again… I called the Dollar lows to look for a pullback from some higher targets … but we’ve seen an extension beyond. What’s more I can’t see an end to this move as yet. I did mention yesterday that in general I feel the Dollar has room to rally into next week … maybe into the last few days of the year… so the overall outlook remains the same.

However, this morning’s shenanigans may have beaten the wind out of the market and the strong risk is that the market will want to let the week lay down and die. Especially in the JPY pairs we appear to have seen spike bottoms and this opens up a few alternatives and one of them being more bullish for USDJPY. However, even then I feel that a quieter day should be seen.

One pair that has opened up the bullish (US) Dollar door is USDCAD and I feel the picture here may well be the clearest and given its elastic character it could mean this holds the cleanest trade.

The base fact remains that the Dollar is still in a (corrective) uptrend and this should be borne in mind – as yesterday highlighted. It’s going to have its consolidation days but overall I feel next week and possible the twilight zone between Xmas and the New Year has a stronger chance of seeing Dollar gains end its move…

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 (+35 pips with open trade) and the new review of the support & resistance levels issued in the daily report and FX-forecaster Trader Package.

Have a great weekend
Ian Copsey

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

Thursday, December 17, 2009

Key ranges have been defined and while the bias is still Dollar bullish watch the break levels…

No Dollar follow-through yesterday but instead a return to the seasonal deathly, dull ranges. It’s almost like the Great Market Puppeteer makes his own fun by cranks up the speed then immediately slams on the breaks… So what will he do next…?

Well, yesterday’s corrective pullbacks were within the likely stalling points I highlighted and therefore the additional blips higher to 1.4463-80 EURUSD and 1.0452-70 CHF are still valid. Recalling the same sort of call I made on Monday for a similar type move that finally ended is a stronger decline than I had anticipated I am rather cautious about this. However, what I can say is that the range and risk has been identified. As long as yesterday’s Dollar corrective lows hold the targets remain valid… If they break first then we’re already in a slightly longer pullback but I don’t see that producing any sharp moves…

This same scenario applies to USDJPY also which spent the day in a sideways consolidation. I still fancy the move to 90.70-77 but any loss of 89.38 is going to lead this back to the 88.30-40 area at least.

The bigger success on the day were the calls in GBPUSD and GBPJPY, the latter buoyed by the break higher in the former. I’d like to see this move higher again today and both seems to have positive momentum behind them but GBPUSD can’t really drop through the 1.6299 low we have seen so far. Until it does the risk is still higher to 1.6443 minimum and potentially around 1.65 while I still like the 148.57 and possibly retest of 149.08 in the cross. However, make note of break levels that would negate that or at least mean the Great Market Puppeteer has put the break on…

The only caveat I’ll make on all this is that while I can describe these moves which are frankly pretty messy now due to the illiquidity, the thing we should always keep in our minds is that the underlying Dollar trend is still higher and there is still another week or so before I see that beginning to fade. I see the cycles topping out either by the middle of next week or just after Xmas and then we should see a decent reaction back lower for the Dollar.

Today’s free analysis is for AUDJPY and can be found on
http://www.fx-forecaster.com/DailyForecast.html along with yesterday’s trade set ups (+105 pips with open trade) and the new review of the support & resistance levels issued in the daily report and FX-forecaster Trader Package.

Good luck
Ian Copsey

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

Wednesday, December 16, 2009

We should see minor follow-through in EUR & CHF but a larger pullback is due…

The bullish Dollar outlook was correct but the extent of yesterday’s gains exceeded my expectations on the day and instead has taken us closer to what I feel will soon be a slightly stronger correction. The strength of the rally has basically highlighted what I feel is the hazard in this market – that projections are not really holding as precisely as before. The low I was expecting at 1.4585 apparently ended at the 1.4585 low and thus yesterday’s follow-through is therefore implied as a final leg of an intermediate decline…

Given that projections are not holding that well I can only highlight what should happen – and that’s a final Dollar rally to 1.4433-63 EURUSD and 1.0452-55 USDCHF and hope these occur. The barrier in the way for EURUSD is the 1.4480 swing low. However, there are Dollar bearish divergences building up in the 4-hour charts so today’s anticipate gains should not be excessive…

It is interesting to see what appears to be a big unwinding in GBP-EUR/CHF positions with GBPUSD remaining stubbornly in its range. I am beginning to more strongly doubt the triangle scenario and feel that as long as it remains above 1.6166-97 that we’re more likely to see a rather sharp rally along with the final reversal in EURUSD & USDCHF… and I wouldn’t be too surprised to see this as high as the 1.65 area…

That should have an impact on GBPJPY but quite how much will also depend on USDJPY. The latter also rallied strongly and if I have any preference then it is for a retest of 90.77 again but then a total reversal. That could actually take the cross quite a bit higher also. If it surpasses 146.41-70 then the 148.47 area becomes possible…

So it seems as if we shall see some decent movement again today (unless the current correction slows to snail pace) but following this we do seem to face a 1-3 days of corrective price action again.

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 (+45 pips with open trade) and the new review of the support & resistance levels issued in the daily report and FX-forecaster Trader Package.

Good luck
Ian Copsey

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

Tuesday, December 15, 2009

The run into New Year could be periods of frustration with intermittent frenzy…

Well yesterday turned out mostly not much like how I had envisioned. I still retain a broad Dollar bullishness and this is where the risk lies but yesterday was a clear indication that the market movers really want to shut up shop and avoid any threat to their profits… The sharp reactions early in the day were no doubt met with disarray but the status quo resumed thereafter.

Ideally I’d like the Dollar to drift higher (or possibly rush to feel the wind in its hair – briefly) towards the sort of initial targets I highlighted yesterday – at 1.4554 EURUSD and 1.0384 USDCHF – and then pull back. If it doesn’t do this then the risk is that we’ll either see the tedious range trading continue or a deeper pullback but I wouldn’t expect much further than yesterday’s corrective lows.

On GBPUSD – just watch out – a move above 1.6325 could generate a mad moment of gains or perhaps I expect too much and it’ll slowly drift. However, the break should, one way or another, risk follow-through to 1.6423-43 at least and I wouldn’t mind betting on the 1.6500-10 area…

Elsewhere USDJPY has been exceptionally subdued. I again hold a bullish preference and that’s the way I’d prefer it to move but the only thing that keeps nagging in my mind is continued range trading possibly with mild slippage to 86.80-09 before the next push higher.

The JPY crosses look stagnant too – but again I feel with a mild bullish bias. So if there is any room for holding a position then I feel the upside would probably be the better option.

However, overall these markets are really ones where you take profit when seen and offer thanks. It matters not that more pips could be reaped as these markets hold greater risk that normal for erratic behavior.

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 (+20 pips with open trade) and the new review of the support & resistance levels issued in the daily report and FX-forecaster Trader Package.

Good luck
Ian Copsey

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

Monday, December 14, 2009

The Dollar now looks weak into next week… no pun intended…

Friday settled a big question. The Dollar looks like following a more direct route to its bullish retracement targets and these could be seen as soon as next week. From what I can see the cycles are Dollar bullish across the board so it’s more now down to identifying the stalling points as it shouldn’t be a direct rally with a couple more corrections in between.

Having said that today should still see follow-through but the bulk of the rapid move is over with now and from this point there is greater risk of more complex corrections but overall maintain the rally through to 1.4460-80 EURUSD and 1.0452 USDCHF. These areas should provide the next intermediate top so expect a pullback from there.

GBPUSD is less obvious and I feel a little more care needs to be applied to this pair. Overall I am bearish but there are a couple of spanners that could suddenly arrive in the works. I wouldn’t been too surprised to see a bit of a pullback first before the next leg lower – but take this as it comes.

USDJPY has broken higher again also and looks quite positive. I have some mixed views over how quickly this can extend higher and with the JPY crosses having been somewhat volatile the balance of the weakness expected in the European currencies versus a bullish USDJPY raises the risk of some pretty erratic moves…

Let’s just say this is my favored view and if there is any risk then it’ll come from more consolidation rather than excessive weakness.

As we go through the week remember that market liquidity will be on the decline and this normally translates into rather erratic behavior. Therefore keep your trades simple and ensure set ups are robust. I have already detected that normal projections and ratios are weakening slightly and may well prove to continue…

Today’s free analysis is for USDCAD and can be found on
http://www.fx-forecaster.com/DailyForecast.html along with Friday’s trade set ups (+ 140 pips) and the new review of the support & resistance levels issued in the daily report and FX-forecaster Trader Package.

Have a profitable week
Ian Copsey

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

Friday, December 11, 2009

It’s still inconclusive but I tend to favor Dollar losses vs Europe but wait for breaks still…

The question still remains… have we seen the Dollar peak against the Europeans or are there further losses to go? It’s was USDCHF once again that pushed the limits again and even forced a new high but not one with which we can get carried away.

To be honest there are conflicting signals. We have Dollar bearish divergences in the 4-hour charts but the Dollar has hardly taken advantage to push support levels aggressively. On the other side what concerns me is that the longer this consolidation extends any break higher in the Dollar would actually threaten to break through the resistance targets I have been highlighting. If that happens then we’ll see more direct gains as the long term retracement targets still have room for 300-400 points…

USDJPY does seem to be attempting to break out of its range however, and well it must as the hourly bullish divergence has seen my RSI move into an overbought extreme so unless it extends the rally quickly then the risk may well still be lower. Perhaps the JPY crosses will provide a clue – though there has been no catalyst here either.

However, I do feel a break must come soon – one way or the other – as just about everywhere there appears to be a decision to be made. This is even true in USDCAD which performed perfectly yesterday in the decline to 1.0478 but so far the recovery has been limp to say the least.

What appears to be the overriding pattern across all currency pairs is that we’ll see a break soon and when it comes it should be quite solid so really now it down to noting where the break levels lie…

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 (open trade) 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, December 10, 2009

It’s possible we’ve seen the Dollar high but it may be prudent to see yesterday’s lows broken…

That was quite a strange day and what I have seen doesn’t really confirm much at all. So much of what occurred yesterday could still be seen as a corrective structure and these tend to whip back and bite one’s “derriere” so I feel we still need treat this with plenty of care.

That should definitely be the guiding word for the next 2-3 weeks frankly as I still feel that the major risk is for 5-10 days of consolidation. The only question that remains in my mind is whether we can still see one more push to 1.4630 EURUSD and 1.0325 USDCHF. Certainly, the overall evidence of a reversal back lower does seem to be coming together and probably more so in GBPUSD.

Even the JPY crosses are beginning to show signs of reversal and AUDJPY looks to have confirmed that already even if it’s AUDUSD that has dragged that higher. However, USDJPY has been dabbling with some fairly key support levels and any move above 88.45-69 would appear to set it on the bullish road once again.

I often find that AUDUSD leads the pack and it looks like this will be the case and if so then 0.9244-64 looks to be the target area but this is probably still within a sideways consolidation. But then we’re back to my expectation of a rather erratic and messy week or two. It seems unlikely that the market is about to launch itself into a trend, increasing exposures ahead of the New Year…

Take care today.

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 (+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, December 9, 2009

One more rally should see the end of this first move higher…

The analysis yesterday was pretty tough and now I’ve had the benefit of hindsight the structure had developed complications which were far too complex to forecast with any accuracy. However, the end result does fit in quite nicely with the expected targets for this first rally in the Dollar and there should only be a little more to go in EURUSD and USDCHF before we get a correction to the entire rally from the Dollar’s lows.

Now given that we only have one week of trading with decent liquidity after which it will fade away dramatically the outlook does seem pretty choppy. This is quite characteristic of this time of year but the 1-2 weeks into the final week of the month should be enough for a complex correction to wreak its havoc before we begin to see Dollar strength again around the turn of the year, probably just before. Thus, as we move forward please take care.

The other move of note has to be the continued losses in USDJPY and the crosses. There does seem to be further to go for them all and my feeling now is that this trading range is now probably with us for several weeks. That tends to match well with the overall expectation of another move higher in USDJPY once this correction is over and probably in line with Dollar-Europe.

However, if there is anywhere that we can expect a slightly more extended move then it is in this JPY group. I suspect we’ll get a correction higher in them all over the first part of the day but look for extension of the downtrends by the second half. By tomorrow or Friday we should have found the final lows (most likely tomorrow) and then the direction should be back higher into range.

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 (+90 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, December 8, 2009

A higher Dollar seems logical but not completely obvious…

Well, what developed was partly expected and partly not. We did see the Dollar follow-through to a marginal new high but without reaching targets and the pullback has been very deep… In fact through most the currencies the picture has turned to one of ambiguity… If I have any preference it is for the Dollar to do the same as yesterday or at the very least move into a sideways consolidation before making that rally.

However, today looks more like a day to be reactive rather than proactive as the momentum picture has also turned to more reflect potential for some choppy range trading. Indeed, this morning is the first time I’ve looked at the price development overall and been struck by the possibility that we have entered the end year twilight zone which all too often generates some rather erratic moves and a reduction in adherence to normal Fibonacci & harmonic ratios…

We should also remember the statement I made yesterday – that there’s not much more in this on the Dollar’s upside anyway and this may well imply a period of consolidation. I certainly can’t envisage new Dollar lows as this stage and if anything the larger positional risk is Dollar short and this would have more tendency towards position squaring as we approach New Year.

Therefore do take care today – and probably for the rest of the month. Be aware of break levels but also remember that even once broken the pullbacks can be similarly choppy too.

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 (+55 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, December 7, 2009

We should now see follow-through higher but the larger part of the rally is complete…

I am quite happy with Friday’s display of strength by the Dollar. It came on cue and from the right sort of support areas and it doesn’t yet look complete. However, I’m not going to get carried away at this point since there are other indications which suggest that the Dollar is not about to make a powerful and extended rally.

For a start the reactions in GBPUSD and AUDUSD were not at all reflective of those in the other three major currencies and this does highlight the risk that what we’re seeing is just the first leg of the correction and we’ll have to be patient for the rest.

The targets for this move are at 1.0325 USDCHF and this should allow 1.4703 at least and at the most 1.4629. Thus the first part of the day we need to concentrate on how deep the correction will be. In USDCHF this doesn’t look too deep while in EURUSD I would prefer a deeper correction but must allow for a shallow one. I’ll outline the general levels to watch out for in the individual analysis.

For GBPUSD and AUDUSD I am slightly mixed with a few scenarios available and thus we’ll have to take these step by step.

Again, we can use the JPY crosses for clues. First of all USDJPY has pushed above the retracement targets I had that would retain a bearish outlook and thus the emphasis does seem higher still. I feel the broad 91.25-70 area has a strong chance of capping any follow-through here.

Equally, the JPY crosses still look supported and should see one more follow-through but we appear to be approaching key resistance levels and may well hold on first test. So this is consistent with USDJPY rallying but the balance must come between the strength of the Dollar versus Europe as opposed to JPY. I don’t think we should outstay our welcome on the JPY 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 (+234 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, December 4, 2009

The Dollar correction should be done and dusted…

I am pretty well satisfied with yesterday’s moves overall. Maybe USDCHF didn’t really display as much movement as EURUSD and GBPUSD but these latter two reacted as expected and thus I am more comfortable with calling the Dollar higher over the rest of this month… and therefore I guess to the end through the end of the year…

However, let’s not get carried away too soon. There is some short term uncertainty given by the JPY crosses which are sitting on key support areas as I write and if these hold then there can still be one more hike. Given that I feel USDJPY still has a final rally to go with a minimum target at 89.21 and possibly as high as 89.60, this should be the main driver of the move. However, this will probably also mean that the Dollar may decide to hang around these current levels against the Europeans just to enjoy the view before moving on…

Therefore, keep an eye out on these JPY cross supports as this looks like being the decisive factor. If they break then it’ll probably be the result of the Dollar rallying against the Europeans… If they hold, then as I detailed, the prospect may well be for some sideways consolidation instead…

The Aussie is due a pullback higher soon – probably from just below 0.9200 which will also help AUDJPY while USDCAD is pretty much in the same boat – a swift dalliance with the 1.0600 area but then a correction implied…

However, the pullbacks in these currencies, specifically the Europeans should enable us to take advantage of the pullback to establish/add to Dollar long positions…

Today’s free analysis is for EURPJPY 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.

Have a great weekend
Ian Copsey

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

Thursday, December 3, 2009

It still looks as if we are still due a move back to 1.5143…

I can’t say that everything quite went to “plan” yesterday but I still can’t see any obvious reversal higher in the Dollar against the Europeans. In fact I still feel the scenario that calls for a retest of 1.5143 is still intact. This certainly appears to be supported by GBPUSD that also still seems to need to make one more push higher to the 1.6745 area (allow for 1.6753) and that in turn could see USDCHF push closer to the 0.9909 low but maybe not quite reach.

I still haven’t altered my underlying view that the Dollar is basically turning higher for the rest of this month at least and probably into next month also. This does seem to be a common implication across the Europeans at the very least. Therefore I still feel we should be concentrating on spotting key bullish Dollar set ups that could land us a solid position.

USDJPY took another step higher but I’m rather cautious around current levels (87.69.) I still feel the main direction is higher but feel there may be room for a correction first. The problem being faced at the moment is lack of common wave relationships and this is not helping in identifying the right structure. However, what we have seen so far tends to work with a corrective structure higher and there does seem further to go…

The fact that the JPY crosses are beginning to look as if there are beginning to struggle at this point is highlighting the risk of a pullback also. Whether it causes a total reversal appears to be more in the hands of the non-JPY currencies and when/if they turn lower. It may even be a combination of both if I am correct in thinking USDJPY can correct lower first. Still, this is still a bit of fluid situation right now and therefore best to take care.

Thus overall today I feel some patience in letting some of these cross plays work their way through and keeping an eye out on the Dollar lows as we approach them.

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 (+120 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, December 2, 2009

There are no real signs of a reversal in the decline – perhaps we shall see retests of lows…

That took me by surprise… It seems as if the Dollar bears have not yet conceded the battle and must raise the inevitable question whether this means we shall see new lows… At this point I don’t think so but it should be an alternative of which we should be aware. If I have any preference it would be for a retest of the lows but not breach which would set up a nice double top/bottom in EURUSD and USDCHF respectively… In many ways that is wishful thinking rather than being supported by a strong result of the wave structure.

However, the same is not implied in GBPUSD and this is what causes me to side with this possible scenario. Here I find it hard to expect a move above the 1.6700-45 area. So with momentum quite firm on the Dollar bearish side we should expect follow-through today but keep your eyes open of Dollar bullish divergences and if my suspicions on GBPUSD prove correct with a bearish divergence developing between 1.6700-45 then consider whether a similar pattern is developing elsewhere…

Even the JPY crosses seem a bit mixed but not really showing any signs of a strong surge higher and thus the rallies appear more corrective. Indeed, on the basis of the expectation that we are due another bout of strong weakness in the crosses it does seem likely that we shall see the European currencies weaken again before long.

This is still a scenario I am considering for USDJPY also – a marginal new high and then a reversal lower. However, the wave structure is exceptionally complicated here. I can only point to key resistance areas and suggest looking out for bearish divergences but if the two events coincide again – weaker European currencies and a strong Yen the move in the crosses will be substantial. Again, it’s some of which we should be aware but I’m in favor of this more because a straight correction higher in USDJPY just doesn’t seem to fit immediately. I do feel it will happen as the Dollar strengthens in general but there is still this flaky feel about USDJPY that has me concerned.

Equally, USDCAD still looks bearish for one more new low but I’m not really keen on a move below the 1.0205 low – more likely this should stall either around 1.0317 or 1.0266…

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 (+170 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, December 1, 2009

We should now see the Dollar extend its gains…

Yesterday turned out to be pretty close to expectations although the early small extensions and corrections forced the support & resistance to be slightly off the mark. However, the retracement levels in EURUSD and USDCHF were very close to the areas I had been looking at and thus the next move should be higher and through Friday’s highs at 1.4827 EURUSD and 1.0174… This should approach the 1.4626 low in EURUSD and 1.0337 high in USDCHF – probably falling short – but then I feel we’ll be pulling back into range for 2-4 days of consolidation.

I don’t think GBPUSD is going to be quite so straightforward… It should move lower along with EURUSD but the depth of the decline yesterday which outstripped EURUSD took me a little by surprise. We’ll have to take care here but there does look like a risk of a drop below 1.6251-70 and possibly into the 1.6147-94 support zone. We’ll have to take that in stages and be aware of what is happening elsewhere.

USDJPY… much as thought, pulled back and has begun some tight ranges, whippy moves just as we suffered before the strong drop. I still have a modest bullish short term outlook but always with one eye across the shoulder. However, assuming this recovery I anticipate develops it could well remain choppy & erratic with a minimum target at 88.00-06 and maybe we can see above 89.00… well, let’s watch the first step and see how this goes… I still can’t rule out a slightly deeper correction into the 88.33-65 area before rallying.

Overall, this should mean we’ll get pressure on the downside for the JPY crosses, mainly driven by the Europeans/Aussie with USDJPY likely to act as a mild restraint. We should therefore be eying the recent lows – with some risk of minor slippage below but I don’t think this is a resumption of stronger losses at this point … unless USDJPY takes another sharp knock.

Overall I feel that concentrating on the continental Europeans is probably the better route as these appear more straightforward, followed by GBPUSD and AUDUSD…

Today’s free analysis is for AUDUSD and can be found on
http://www.fx-forecaster.com/DailyForecast.html along with Friday’s trade set ups (+38 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