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HARMONIC ELLIOTT WAVE

Thursday, December 23, 2010

While there is still risk of a correction the current trend should continue through New Year

Please note The Daily Forecaster will return on the 3rd January


These past few days have sure been testing. Corrections have never really been able to develop to their full and each day we have seen the directional moves extend. It has been very choppy and I don’t see an end to this today or tomorrow. However, the main Dollar bullish expectations for EURUSD and GBPUSD remain on track – even if it’s a meandering path. Rather obtusely USDCHF and USDJPY have taken exactly the opposite path, seeing the Dollar lose ground bit by bit although I feel these are probably close to a decent bounce.

If I extend my horizon through to the end of the year I feel the European trends will likely extend further although by early next year a correction will no doubt be due. I am still aware of a slightly duality for USDJPY but the 82.63-93 area seems to be fairly important. I’ll not get too bearish until this area breaks.

The anticipated decline in EURUSD should enable EURJPY to retain its general decline and this should see quite some losses. That is the one doubt I have about USDJPY as the anticipated eventual target is closer to 100. It may be a case of timing and how deep retracements develop but it does suggest we do have to be aware of the critical USDJPY support.

AUDUSD may threaten a period of consolidation even if the current rally has been sustained even in the face of bearish divergences. This one’s a tough call but I find it hard to see a constructive bullish structure here. USDCAD… It’s still in the larger range that has been around for around 9 months now. Perhaps it’s not rocket science but we need a break of the 0.9929-77 lows to trigger losses and until then the chance of further consolidation remains. However, do watch out, as if we see declines today the break lower could become a reality.

May I wish everyone a splendid festive season and happiness and health for the coming year.

Today’s free analysis is for USDCHF and can be found on http://www.fx-forecaster.com/DailyForecast.html along with yesterday’s Trader Package Review & Trade Set up report. (+0 pips)

Ian Copsey

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

Wednesday, December 22, 2010

If the Dollar is going to rally this side of Xmas then today’s the day … else wait till next week

Please note The Daily Forecaster will take a break from the 24th December and return on the 3rd January


Yesterday was a strange day, but that’s saying very little given the time of year. Maybe too many traders were more interested in first lunar eclipse on the winter solstice in 456 years… I could accept that if 456 had been a Fibonacci number... but it’s not… More likely they were more interested in a quiet period ahead of a few days of merriment.

The Dollar neither made minor early gains nor retraced as far as I had expected, but ended the day with GBPUSD, EURUSD and EURJPY sitting close to the more aggressive break lower I had been anticipating. Will the market have the energy to commit to the stronger follow-through today? Maybe… maybe not. Most probably they’d prefer not to have the hassle of being caught in the game of pass-the-parcel where the person left holding the parcel incurs a loss.

However, the risk is there and with just today and tomorrow left offering a semblance of almost normal trading conditions if the right levels are broken then those three currency pairs will be sent tumbling. If those levels hold – and there are signs that they will – then all we’re going to see is a total recycling of the correction that could take us into the long weekend. However, once the weekend is over the Dollar should extend its gains then.

Just a word on USDJPY… It’s struggling but just about clinging onto a push back higher after failing at the 83.50 support I pointed out yesterday. It needs to make further gains today to keep on that bullish track but I doubt we’ll see any fireworks … or red moon… today. Certainly USDCAD looks like it will extend its consolidation today but that does seem to be due a subsequent push higher. AUDUSD looks as if it will subside into a sideways consolidation also.

Thus the stronger risk is for continued subdued trading – but just watch out for the key Dollar resistance levels.

Today’s free analysis is for GBPUSD and can be found on http://www.fx-forecaster.com/DailyForecast.html along with yesterday’s Trader Package Review & Trade Set up report. (+40 pips)

Good luck
Ian Copsey

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

Tuesday, December 21, 2010

A little bit more of the same…

Please note The Daily Forecaster will take a break from the 24th December and return on the 3rd January

The week did start with early corrective price action and saw losses in GBPUSD and EURUSD but not with the aggression I had expected and it seems as if the market has slowed to a crawl. I guess we can’t be too surprised with that since the market needs a catalyst to prod them from the pre-Xmas preference for slumber. Having gone through the charts I tend to feel there is risk of a similar sort of day.

GBPUSD didn’t reach its target and from yesterday’s high I have problems in identifying corresponding targets. I don’t think USDCHF has quite finished its pullback either. To top it all EURJPY, while it did decline, has done so in a manner which looks like it has made a slightly stronger decline in the current sector of the structure. This does look like extending a little further but a deeper pullback will then be due. Given USDJPY has entered into its own time warp the implication I see in general is for EURUSD to probably dip a little to generate the anticipated extension in EURJPY but then see a correction higher. That seems to suit all the currency pairs.

I should add a little more on USDJPY. The upside targets also haven’t been seen in the larger picture and I still have a preference to see one more rally. However, it appears to have dipped too far for this to occur directly and it has left me with an impression that we may see a larger consolidation develop. This could still see losses but most likely in an erratic manner. I think we can write this one off until next week.

It’ll mean just a bit more patience for the EURUSD & GBPUSD downside – USDCHF upside – to develop but I still have a feeling we shall see it this side of the Xmas break and could be quite aggressive.

AUDUSD has also begun to look more balanced. I’m open to both sides of the market – probably favor consolidation more. USDCAD is approaching key resistance that should highlight extension or reversal… Take care with this loonie…

Today’s free analysis is for USDJPY and can be found on http://www.fx-forecaster.com/DailyForecast.html along with yesterday’s Trader Package Review & Trade Set up report. (+45 pips)

Good luck
Ian Copsey

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

Monday, December 20, 2010

Friday destroyed any lingering thoughts of Dollar losses…

Please note The Daily Forecaster will take a break from the 24th December and return on the 3rd January


It seems I clung on the possibility of Dollar losses extending into this week just a bit too long… Friday put paid to those ideas very swiftly… The alternative does appear to be a strong potential for the gains seen towards the end of last week to extend and in a manner that appears to imply quite an aggressive follow-through over the next 2-3 days of some 150-200 points in the EURUSD and GBPUSD. I can’t see any reason for USDCHF not to follow suit but I do find this less clear with its structure…

However, before that follow-through there does appear to be a need for a pullback and that should dominate for the first half of today at least and may stretch into early NY trading. Once this correction has been seen the Dollar gains can emerge.

The collapse in EURUSD provoked the anticipated losses in EURJPY and equally this is going to be affected over the next few days also. It has a similar directional expectation as EURUSD has – a mild correction followed by losses. The initial losses should be limited but by tomorrow or Wednesday I suspect we’ll have seen a move closer to the 108.33 low. Ideally I’d prefer something a little more aggressive but this will probably require USDJPY to join in on the downside. I’m not entirely clear on USDJPY however, very much split between continuation of the upside and a recycling of the correction back to 82.83… The last few days of last week saw the rally begin to labor to leave it poised between the two scenarios. That’s something we’re going to have to watch and be aware of break levels.

With 4 ½ days of trading left the risk is that we essentially will probably have only 3 days of anything resembling normal trading conditions. It is just a resemblance but it is probably the illiquidity that could cause the anticipated sharp losses in EURUSD and GBPUSD.

Thin markets = more volatility so take care…

Today’s free analysis is for EURUSD and can be found on http://www.fx-forecaster.com/DailyForecast.html along with yesterday’s Trader Pack
age Review & Trade Set up report. (+105 pips)

Have a profitable week
Ian Copsey

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

Friday, December 17, 2010

Today may well be similar to yesterday

Yesterday went pretty much to plan, perhaps a bit slower than I had anticipated, but overall we saw the Dollar manage a pullback. As the headline says, today could be similar. I do feel we’ll see some Dollar losses against the Europeans but I’m not expecting these to be sustainable which will leave us still with the fine balance between stronger gains or a stronger reversal lower.

I do admit that I still have the stubborn preference for the Dollar to return to the downside, perhaps by the end of the day or over next week. I’ll still watch to see what happens today but the signs I see tend to support that view. Things can morph of course and the underlying momentum picture is still Dollar bullish which is why I doubt we’ll see any early resolution to the balance.

As a broad outline, to try and judge how the two alternatives may develop, the expectation I have is for the first part of today to be Dollar bearish but not excessively. It will be how it then reacts from those lows which will determine the final outcome. A ragged and unconvincing Dollar rally that fails below yesterday’s highs, probably lasting for the rest of the day will increase the risk of a reversal back lower for losses into the last week of the year. If the reaction is stronger then any breach of those highs will send it on an extension lower but don’t expect any breach of the 1.2968 low just yet…

Another development that pushes more to the Dollar bear camp is USDJPY. Its failure to overcome the 84.50 high and the deeper retracement appears to reflect the correction which I had expected from the 84.80 area. That being the case, it will imply a much lower final target and a much sooner reversal lower. That seems to be backed up by EURJPY which has crept lower and seems poised after the 112.18 high to extend losses. The cross can still wriggle & jiggle a little before it goes down but I can’t see this lasting for too long… Thus beware, this final high in USDJPY does look terminal…

Today’s free analysis is for EURJPY and can be found on http://www.fx-forecaster.com/DailyForecast.html along with yesterday’s Trader Package Review & Trade Set up report. (+50 pips)

Have a great weekend
Ian Copsey

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

Thursday, December 16, 2010

It seems to me that we are at a critical point between bullish & bearish…

Well, that wasn’t choppy at all… The declines in GBPUSD and EURUSD were much deeper than I had been expecting and have come tantalizingly close to confirming a resumption of the underlying Dollar uptrend. It would be very easy to assume that this was the case… perhaps it is… but after a lot of frowning, burrowing of brows and measuring I’m not really convinced this is the case…

We should remember that this is December. I have noted a higher than normal instances of extreme projections that are not so common. This appears to be a result of the lack of liquidity forcing the game of pass-the-position to accelerate with limited corrections.

Let’s just say that I feel it would be best not to make a final decision. At the very least I feel that a pullback is due from those declines and the key will be the critical areas that would confirm extension of Dollar gains… or on breach would cause the Dollar to head lower again.

For other currency pairs such as AUDUSD, USDCAD and indeed, USDJPY the reactions have been far more conservative and actually tend to fit better with a continuation of their respective trends. In particular USDJPY is working exceptionally well with the current move higher and brings with it more confidence with the structure. For that reason I shall err on the side of the Dollar resuming losses but will highlight the areas we need watch for that could throw back the idea in my face.

Thus, keep your minds open to identify what is happening and remember Xmas is just 6 ½ trading days away…

Today’s free analysis is for USDCAD and can be found on http://www.fx-forecaster.com/DailyForecast.html along with yesterday’s Trader Package Review & Trade Set up report. (+30 pips)

Good luck
Ian Copsey

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

Wednesday, December 15, 2010

Today looks like a return to the messy stage again…

The outlook for marginal new Dollar losses proved correct although failed to reach the target levels in general. Never-the-less the structure seems a little more straightforward but given we’re probably into a correction we’ll have to be aware of the type of market we saw last week. If I am to state a preference here I have a feeling that the correction may not last quite as long as last week which means we’ll have to be on the lookout for Dollar losses to resume at some point.

I mentioned yesterday the Dollar cycle lows by earliest next week – possibly stretching into the last week of the month. Well, it looks like the length of this correction may well dictate when the final low will come and for Dollar gains to resume. We must keep in mind that we only have 5-6 trading days left ahead of Xmas and effectively 3 days after Xmas. It is quite normal for the market to resume a more directional bias in the last week of the year so the rough timing of these cycles does appear appropriate.

After yesterday’s dip this should give USDJPY the opportunity to push above 85.00 over the coming days in what should be the final leg higher. In particular this implies quite a sustainable subsequent decline to new historic lows. Unless I am completely wrong about the Dollar making gains against the Europeans this will imply a removal of support from the JPY crosses… I am just finding the current pullback in EURJPY just a bit deep for comfort even if it stalled at the 112.20 resistance yesterday. It still looks bullish to me and it’s this anticipated extension of gains that concerns. This triangle is something to watch closely as should both USDJPY and EURUSD collapse the play has to be on the cross.

Otherwise, I feel today will see more sedate trading and the risk of some choppy moves again.

Today’s free analysis is for AUDUSD and can be found on http://www.fx-forecaster.com/DailyForecast.html along with yesterday’s Trader Package Review & Trade Set up report. (+85 pips)

Good luck
Ian Copsey

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

Tuesday, December 14, 2010

This move down in the Dollar looks as if it should extend a little further…

December illiquid markets are a combination of deathly, dull and erratic ranges that when they break just make a huge adjustment within a flash. The latter is what we saw yesterday but didn’t reflect what I had thought to be the risk… In some ways I’m happy as I didn’t really like the Dollar upside from a structural perspective but still being a correction leaves us with a mixture of alternatives. I understand that Lunar cycles are still bullish on the Europeans through to next week at least, perhaps the end of the month at a stretch so this leaves us with the prospect of a similar pattern of consolidation and frenetic breaks…

As things are now my main impression is that we may not have seen the end of the Dollar losses quite yet. Clearly the collapse has brought with it more bearish momentum conditions which, at the very least, should prevent a significant reversal but could end up with an eventual one. My own preference is for a mild extension of yesterday’s Dollar losses but then a return to consolidation/correction.

Even USDJPY was hit by this. The reversal at the 84.29-39 area was expected but I had expected a correction and slightly deeper extension higher before the larger reversal which we saw yesterday. However, equally, I can’t see this bearish pullback deepening much more and, indeed, may well have completed the correction.

That leaves the cross looking form – and again something I had not really wanted to see. It is still on the bearish side overall but this rally cannot extend much further without breaking the larger bearish structure. It would be prudent to take a more neutral approach to this as it would seem, at this point, that the only thing that could allow the cross to resume is strong weakness in USDJPY. Well, it’s not impossible but I don’t think it’s a call I want to make at this point…

As always at this stage in December, take care. The whippy & erratic market behavior could easily resume…

Today’s free analysis is for GBPUSD and can be found on http://www.fx-forecaster.com/DailyForecast.html along with yesterday’s Trader Package Review & Trade Set up report. (+75 pips)

Good luck
Ian Copsey

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

Monday, December 13, 2010

I still feel the main risk is consolidation

With now just 9 days of trading before Xmas, of which only this week will have any resemblance to normal trading conditions (and even that is only a distant resemblance) the hunger for risk remains minimal. The past week has reflected this sentiment through the whippy and difficult market conditions and frankly I can’t see this changing – or perhaps with the exception of USDJPY and by implication the JPY crosses.

While the stand-off between the Dollar and European currencies still looks to extend, USDJPY bounced perfectly from its support on Friday to set up a final push higher in the rally from 82.33. Once this is complete the tide should turn and retreat to lower levels and drag the crosses with it. However, I do feel this will be for a correction only in USDJPY, the question being just how deep this can go. EURJPY on the other hand I tentatively feel can move lower in a more sustain manner. Now, that either means USDJPY will reverse lower totally (likely only if it doesn’t make minor new upside targets over the coming day or two) or EURUSD is going to have to provide the fuel for the drop in the cross. Frankly this looks more likely. What is a little difficult to judge at this point is quite how long the current impasse will remain.

The European currencies have been mapping out a complicated and hard-to-follow corrective pattern. However, this does seem to be part of a mild bearish Dollar correction which should be followed by a resurgence in Dollar strength. This should always be kept in mind as the main risk with the immediate corrective price action due to come to a conclusion – but as I mentioned “when” is more difficult to judge.

For the moment I see the messy moves remaining so look for the key USDJPY and EURJPY resistance levels and also the break levels that would allow the downside to resume…

Today’s free analysis is for EURUSD and can be found on http://www.fx-forecaster.com/DailyForecast.html along with Friday’s Trader Package Review & Trade Set up report. (+0 pips)

Have a profitable week
Ian Copsey

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

Friday, December 10, 2010

Momentum is slow and may retain the consolidation but keep a watch on the Dollar upside

Daughters’ and their cuddly toys lying on the floor… cloud the picture and that caused those whipsaws about which I had warned some care. I am still very wary of this December market. Corrective price activity due to low liquidity can cause the most complicated corrective structures and this makes me approach the current market with a lot of caution.

Even as I went through the currency pairs I found myself Dollar bullish on one and bearish on the next… then bullish again. It doesn’t make for confident calls. However, one currency that stood out was EURJPY. It’s still early days but yesterday’s peak came in right on target and one that implies significant losses. Well, that does mean one of two things: either USDJPY is going to take a dive or EURUSD will…

Well, EURUSD was one of those currency pairs for which I felt a Dollar bullish view had legs. I am only mildly bullish USDJPY. That would take care of the downside for the cross… However, the cross still appears to have a modicum of support for the correction higher to deepen but I suspect it should break lower again later today.

The Aussie looks bearish too… It’s just GBPUSD and USDCHF where I feel less inspired by the Dollar upside.

I therefore intend to start the day with a more neutral stance and watch what happens once EURJPY has corrected sufficiently to suggest another leg lower may occur. I should warn that even with a new low the next risk is still for a correction higher and probably quite deep. Therefore I feel we should avoid expecting particularly aggressive Dollar gains just at this point.

Beyond these comments the by-word for this time of year remains caution. I should remind that it is a particularly flaky time of year where relatively small orders can generate excessive moves. Such is the reluctance by major market players to risk any loss reducing bonuses the preference is to remain square and keep the current bounty. However, with such thin liquidity it can send daughters’ block towers tumbling in an instant…

Today’s free analysis is for USDCHF and can be found on http://www.fx-forecaster.com/DailyForecast.html along with yesterday’s Trader Package Review & Trade Set up report. (+190 pips)

Have a great weekend
Ian Copsey

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


Thursday, December 9, 2010

This market looks a bit like my daughter’s bedroom…

Yep, you’ve got it… One hell of a mess…

The more I look at what’s happening the more I have to look in the thesaurus for words that mean, messy, erratic, complex, muddled, cluttered, chaotic, confused, disheveled, disorganized, muddled, slapdash, untidy, unkempt, disorderly, sloppy, slipshod and bedraggled…

Perhaps I should basically suggest that today should be up and down but leave you to guess which comes first. In some cases it does look like a flip of the coin will do. Well, I do have a view and I’m quietly confident of it, but this is one of those markets where we need to be aware of minor breaches and quick reversal where stops could easily be triggered.

However, the common risk I see across most of the currency pairs is basically Dollar bullish followed by a reversal lower. If I am to choose a second ranked risk then it’s still Dollar bullish followed by consolidation. Obviously the last will just cover all eventualities – Dollar bearish and then bullish… However, if the final alternative occurs then we may well be seeing a more directional move… However, the first option remains my favored outcome but I do feel we have to go through this whippy move higher first…

If there is any pair that may escape this pattern it could be USDJPY. I doubt it as I feel we need a deeper correction first before it can go back to retest and probably break the 84.39 high. Don’t get too carried away with the prospect of a sustained rally though.

A last note on EURJPY… It has come to a point where there may be a final push higher but it’s approaching key resistance levels. This may be a product of USDJPY pushing higher but frankly, given the level of the anticipated whippy moves I’d rather concentrate on price in each currency pair. Once this high in EURJPY is in the risk is lower but will probably have a slow start which means in the slightly larger picture we’re still talking range trading to a certain degree.

Treat each trade as short term, take profits early…

Today’s free analysis is for USDJPY and can be found on http://www.fx-forecaster.com/DailyForecast.html along with yesterday’s Trader Package Review & Trade Set up report. (+30 pips)

Good luck
Ian Copsey

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

Wednesday, December 8, 2010

Dollar gains look more likely today

The caution I voiced yesterday concerning Dollar strength proved correct as it spent most of the day on the back foot but losses were restricted which in turn provoked a reversal back higher by the end of the day. While I can’t totally rule it out I don’t think it’s quite time to call for a massive extension of gains but the upside does seem more vulnerable at this point with hourly momentum having reached current levels with some panache. A pullback does seem due but later extension does seem probable.

We’ll have to see how this goes but as far as I can see the sort of areas these structures appear to target do not really point to major now highs at this point. I am therefore more inclined to a more whippy and corrective style of development. Given there is only a week or 10 days of decent liquidity the prospect of grinding out the year in a choppy manner does seem to be more probable.

In particular the strength in USDJPY was much more evident than I had been looking for and the push higher does appear to have ruled out the more direct bearish risk. This pushes me more to the probable consolidation to be an upward movement rather than sideways. Therefore we should always be looking out for an eventual end to any Dollar losses.

This strength in USDJPY has taken EURJPY back higher and seems to have taken the fuel out of the downside. I’ll therefore take the foot off the bearish accelerator but can’t actually say that we’ve seen sufficient strength to rule out the bearish structure totally. In particular this cross has the potential to generate some rather horrendous consolidation patterns so best be cautious until some other catalyst develops.

Therefore, today does seem to imply a pullback lower in the Dollar and who knows, this could last for much of the day if the market has lost interest but I do feel the current basic risk is for a correction higher in the Dollar.

Today’s free analysis is for AUDUSD and can be found on http://www.fx-forecaster.com/DailyForecast.html along with yesterday’s Trader Package Review & Trade Set up report. (+40 pips)

Good luck
Ian Copsey

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

Tuesday, December 7, 2010

Dollar gains have been positive but haven’t confirmed follow-through…

I was a little tricked yesterday… The expected high around 1.3447 didn’t materialize and it was only later I found the broker feed to my charting hadn’t caught the blip higher on Friday to around 1.3437-41… So that nullified the risk I had outlined and generated direct Dollar gains over the day.

So that looks positive for the Dollar uptrend… or does it? What has been noticeable is that yesterday’s Dollar stalling points have been in areas that generate a significant ambiguity in the structure. In fact, they are almost pinpoint perfect for a more negative structure… What is more, in the gains seen yesterday I’m not even convinced that they would work well in a direct Dollar bullish structure.

What does this mean? To be honest, there are a number of alternatives. We have to remember that as we move into the most illiquid time of year and at a time when the underlying desire is for traders to retain profits the thirst for risk is not foremost in their minds. The political background is awash with confusion as major industrialized nations compete for the prize of being the most incompetent that there is a valid risk that we could just see a period of consolidation as we head into the Xmas-New Year break.

As a broad generality December illiquidity has a tendency to generate one of two reactions: a persistent trend or plain standard consolidation. Therefore, at this point, with the ambiguity it is best to play our cards with caution until enough are face up to judge which of the two will develop.

In particular I can see some signs of potential AUDUSD strength which would not be a surprise as a carry trade over the New Year, and also in USDCAD which remains within a long, long consolidation range.

If the consolidation alternative proves correct then the one area I can see risk is in USDJPY and EURJPY. The latter still looks bearish to me so if USDJPY loses out by too much I think we could see a swift move lower to fuel the cross.

These are all potential outcomes. What we need to do right now is assess the risks of each.

Today’s free analysis is for EURJPY and can be found on http://www.fx-forecaster.com/DailyForecast.html along with yesterday’s Trader Package Review & Trade Set up report. (-20 pips)

Good luck
Ian Copsey

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

Monday, December 6, 2010

Beginning of the reversal or the beginning of the end?

Friday provided yet another surprise. The break higher in EURUSD and lower in USDCHF was not on my agenda. At first I looked at it and wondered whether this mean the Dollar will begin to lose out again. Maybe the multi-year down trend was back in place. Well never say never, but the USDCHF high just doesn’t appear to fit into my prior assumptions. The fact that GBPUSD failed to play tag with the move also provided another misplaced piece in the puzzle.

The glaring alternative is that we are seeing a pullback in EURUSD and USDCHF to the Dollar’s gains thus far. In fact, this scenario does appear to be very convincing. Even pullbacks in GBPUSD and AUDUSD look possible. What about USDJPY? Well, it’s less convincing but also just a little ambiguous but if I have any stronger wave structure and relationships then they’re on the upside and not down…

In general from the weekly review: http://www.fx-forecaster.com/files/Weekly_Review_Support_Resistance_3rd_December_2010.pdf the overriding impression from the longer term charts is that we have merely seen a pullback to the Dollar strength so far with several currencies retesting respective daily Clouds which are still basically Dollar bullish. These should be enough to generate a reversal of the losses thus far at the very least and will keep the underlying risk Dollar bullish – at least for the short term and if this develops as I think, then for the longer term also.

Indeed, I feel we have either seen the full extent of the correction in most cases or we are very close to the end.

Just a word on EURJPY. I remain looking for stronger losses although the very short term does have a continuing mild risk of the pullback higher deepening. I’m tending to err on the side of direct losses but feel we do need to keep a close eye on the near term. Most likely this will be driven more by a falling EURUSD along with a less aggressive move higher in USDJPY.

Thus, today look like a day for identifying the Dollar lows…

Today’s free analysis is for USDCAD and can be found on http://www.fx-forecaster.com/DailyForecast.html along with Friday’s Trader Package Review & Trade Set up report. (+20 pips)

Have a profitable week
Ian Copsey

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

Friday, December 3, 2010

The Dollar pullback should soon be complete…

Yesterday was a mixed bag… and a pretty messy one as well but one that did basically see Dollar losses by the end of the day. It has brought us close to the retracement areas against EURUSD and GBPUSD that I mentioned yesterday. Beyond that USDCHF and USDJPY both dropped rather strongly and against expectations. These two in particular have caused a certain degree of doubt over whether they can resume the current Dollar bullish structure. However, I can’t say it has broken as yet, but quite what they represent is more unclear and do beckon a more cautious approach.

In particular there has been an ambiguous interpretation of this pullback in USDJPY. Either way the implication is for eventual losses to a new historic low. The question has been more whether the current correction is complete. Given EURJPY has also approached a full correction the prospect of both USDJPY and EURUSD falling is not out of the question, but probably preferred, even if it is only for part of the entire decline. In particular a break of yesterday’s USDJPY low would be a strong pointer and below 82.77 would confirm…

The dip in USDCHF was totally unexpected also. In many ways I have remained bearish USDCHF overall and have considered this rally as corrective. Its recent sporadic pattern of correlation with EURUSD has made it more difficult to ascertain quite what it will do and when. Ideally it should still extend its gains since if EURUSD makes the expected final decline it would appear logical that USDCHF can rally to the higher target I have been looking for… I think the next couple of days could well highlight the strength of this expectation.

So as we go into the end of the week I do see the corrective targets in EURUSD, GBPUSD, AUDUSD and EURJPY all close to current price. Therefore watch these for signs of a resumption of Dollar gains… or for break which would then turn the Dollar on its head and imply a larger reversal.

Hopefully USDCHF and USDJPY will extend gains one more time but take care with these given the slight deviance from the expected rallies in both.

Today’s free analysis is for GBPUSD and can be found on http://www.fx-forecaster.com/DailyForecast.html along with yesterday’s Trader Package Review & Trade Set up report. (+25 pips)

Have a great weekend
Ian Copsey

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

Thursday, December 2, 2010

The correction should continue today

I thought all was going really well for the first half of the day, with key levels being tested simultaneously across the Europeans but the anticipated resumption of Dollar gains didn’t materialize… This was quite disappointing but the Dollar rally hasn’t finished yet. The current pullback still has a little way to go yet but I suspect that by the end of today or perhaps into tomorrow we should see the correction complete for the uptrend to resume.

This should mean that by the middle of next week we should see the Dollar end its rally and generate a reversal. The interesting point in all this is that from the perspective of USDCHF the Dollar’s gains appear to have been a correction only. The medium to long term implications for GBPUSD and EURUSD are therefore rather unclear. However, at this point I think we should just be prepared for Dollar losses to resume by the end of next week and see how they develop.

USDJPY saw limited losses yesterday as expected, actually not even reaching my minimum target which was only 10 points below the previous 83.41 low… This should set up the final rally here also to coincide with the expectations of a return to Dollar losses against the Europeans. The difference here though, is that I will be expecting a move to new historic lows – possibly around 73.50-74.50. If I consider this move in USDJPY to be indicative of what may happen against the Europeans then the Dollar downtrend appears to be implied…

With the deeper correction in EURUSD, equally we have had the same situation with EURJPY. No new lows and a break of the corrective resistance I was considering means we are seeing an alternative picture, but still overall bearish. The correction higher has a little more to go here also but once complete should herald losses and potentially to approach the old 105.42 low…

AUDUSD has also benefited from the Dollar weakness. I’m a bit more mixed here with potentially a complete correction already, but equally with a structure that would allow one more dip… The upward structure is a bit messy so take care. USDCAD… what can I say about the Loonie… but just take care…

Today’s free analysis is for USDCHF and can be found on http://www.fx-forecaster.com/DailyForecast.html along with yesterday’s Trader Package Review & Trade Set up report. (+205 pips)


Good luck
Ian Copsey

FX-forecaster Trader Package now available at €20.00 pm
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Wednesday, December 1, 2010

A mild pull back is possible but the underlying Dollar risk remains higher

On the whole I was satisfied with yesterday’s moves. Not all targets were met with accuracy and GBPUSD dipped lower than expected, but otherwise the basic anticipated directional moves developed. The Dollar highs against EURUSD, GBPUSD and AUDUSD all appear to be intermediate projection levels which means there should still gains ahead. However, bullish momentum has become stretched and the first move today is therefore more likely to be corrective.

Now, here is where I see some potential deviation between EURUSD and GBPUSD & AUDUSD. The latter two appear to have reached supports which appear to indicate a slightly longer correction while EURUSD does still appear to require one more extension lower. I do have some reservations since there are bullish divergences here which should be acknowledged. I shall provide the resistance levels here which I feel will cap for the next leg lower. However, any breach of these resistance levels will bring these three into correlation.

USDCHF dipped lower as I had preferred, and quite against the Dollar gains seen elsewhere. It didn’t quite reach the support levels I had been looking for but probably this was enough and the implication is therefore still for Dollar gains. It would seem that for today USDCHF and EURUSD may well be correlated for a change.

USDJPY also dipped as warned. I’m not sure the pullback is complete. Certainly it has done enough to complete a correction but the lack of an hourly bullish divergence and the risk of one final dip should be recognized. Overall I do feel this will see one more rally but doubt now whether this will be able to break above the 85.92 corrective high.

This should prevent EURJPY from repeating it’s super-bearish performance yesterday. I do look for the cross to trade quite similarly to EURUSD – that is a correction higher followed by losses but it seems that the bulk of the move has occurred. From the new low – as with my expectations in EURUSD – we should see a longer lasting correction before another bout of losses.

For today be aware of critical break levels and the potential for a solo Dollar rally against the Euro (maybe slightly against the Yen) but from then a period of correction.

Today’s free analysis is for USDCHF and can be found on http://www.fx-forecaster.com/DailyForecast.html along with yesterday’s Trader Package Review & Trade Set up report. (+110 pips)

Good luck
Ian Copsey

FX-forecaster Trader Package now available at €20.00 pm
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Tuesday, November 30, 2010

The outlook seems a bit more mixed today…

Overall yesterday was quite a successful one with Dollar gains seen broadly across the board. Some targets were met and some still seem to have a little further to go. If I have all the moves correct then there certainly looks to be room for some rather disjointed developments today. EURUSD, while reaching a rough area which could see a larger reversal still seems to have further downside risk. However, while I called for the 1.5527-35 area in GBPUSD as a low yesterday, which hit reached to perfection, it implies a pullback higher…

So we have a dichotomy in terms of correlation between the Europeans. Well, I think we can take USDCHF out of that equation at the moment as it seems to prefer taking its own route at this time. That does leave a basically bullish GBPUSD view versus a bearish EURUSD… It’s never comforting to have this type of conflict and certainly it would be best to be aware of the risks overflowing from one to the other, but for now I do prefer these two taking separate routes.

USDJPY also managed to clamber its way higher. I’d like to think it could make another minor new high but momentum here is looking a bit strained. There are bearish divergences developing right from the hourly chart through to daily… The daily divergence would require a break below the 82.77 low but I think this is doubtful for now. I still prefer the scenario of seeing a pullback soon – and as I mentioned, preferably from a minor new high – but I feel there is still one more leg higher in it after this correction.

This tends to fit in with all the majors which do still seem to all require a new Dollar high either by late this week but probably into next.

AUDUSD fits that description too – as well as USDCAD… I do see signs that by the middle of next week approximately we should start to see the Dollar fall back lower and in what could be quite a deep retracement through to the end of the year.

For today, just keep an eye out on the key levels in EURUSD & GBPUSD given the apparent requirement for them to take separate routes versus the Dollar…

Today’s free analysis is for USDJPY and can be found on http://www.fx-forecaster.com/DailyForecast.html along with yesterday’s Trader Package Review & Trade Set up report. (+25 pips)

Good luck
Ian Copsey

FX-forecaster Trader Package now available at €20.00 pm
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Monday, November 29, 2010

We’re at make or break here … but momentum seems to favor further Dollar gains overall…

Dollar gains were seen as expected on Friday. When going through the weekly indicator review (http://www.fx-forecaster.com/files/Weekly_Review_Support_Resistance_26th_November_2010.pdf) the general impression I received was an overall Dollar bullish one. Momentum in the longer term charts seemed to provide a more bullish outlook. From a price perspective we have reached key resistance levels and I do feel that there is risk of a potential correction at least and just how far that moves will determine the larger trend. As I mentioned, this does seem to have a more Dollar bullish bias.

It’s not impossible that this correction is already complete and therefore we’re going to have to watch the next break closely. From what I can see, the early risk is higher but I’m not convinced at this point that we’ll see direct follow-through and suspect we could see a second attempt at a correction over the course of today. Either way, if I cam correct on the extension of Dollar gains then it should be quite a solid move lasting 2-3 days. Even then I don’t think it will provide the final high and there’ll be more to come either by late in the week or into next week.

I will detail the levels to watch out for that would indicate a reversal lower again within today’s analysis.

I did mention on Friday that we should at least see a deeper correction. If that is the case, then the reversal should come later today. However, having looked over the charts this morning and seeing the damage generated on Friday I am considering an alternative that would maintain more direct Dollar gains and probably to the mid 1.20’s EURUSD. Still, there are a few hurdles to overcome but the next few days should clarify the underlying structure.

USDJPY has extended gains and I’m beginning to consider slightly higher targets here also. It is moving more slowly and I don’t expect this to change but even with a more bullish view I don’t think this is going to generate any surge and potentially we’ll see this higher target reached as EURUSD reaches the mid 1.20’s target area. Bother should cause a deeper reaction with USDJPY most likely then to find a new historic low. That should keep EURUSD on the bearish side but looks as if the route will be a messy one.

Today’s free analysis is for EURJPY and can be found on http://www.fx-forecaster.com/DailyForecast.html along with Friday’s Trader Package Review & Trade Set up report. (+30 pips)

Have a profitable week
Ian Copsey

FX-forecaster Trader Package now available at €20.00 pm
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Friday, November 26, 2010

Dollar gains should extend further today

Dollar gains were seen on Wednesday as expected followed by a respite yesterday which is only normal with the States effectively on a 4-day weekend. Wave development has clearly slowed and this has impacted on momentum which has pulled back from its highs and presented the potential for divergences to develop. The question is whether the market continues to have a fire in its belly to maintain the furious Euro bearishness. Many appear to have a glint in their eyes remembering the frenetic decline that begun from the 1.5143 high exactly one year ago and apparently have begun tapping on their calculators to work out just how much profit they can reel in with short Euro before the end of the year.

I remain hesitant to get too bullish on the Dollar at this point. Certainly, the structure I had been following in EURUSD has broken down and the temptation has been to follow the long line of lemmings in their quest to jump over the cliff edge. However, I can’t say at this point that they won’t find plentiful manna at the end of the drop. At the same time I view the monthly chart and while I can see a more bearish alternative, the early stages of the move appear to be too swift to slot into that monthly structure.

USDCHF has been a curious animal of late but it hasn’t yet reached my target retracement resistance – the highest is way up at 1.0444. Even reaching there it could well still be in a downtrend. GBPUSD… well, that’s messy but has reacted with less strength to the Dollar’s resurgence.

Then when I view EURUSD within a bearish structure it needs a deep pullback first to make it more viable, at least as far as I can see. It also has the capacity to descend into a month or so of range trading which again doesn’t seem too surprising given that year-end illiquidity is just around the corner. As I mentioned on Wednesday, while the situation within the EEC is pretty dire most of the world appears to be competing on the basis of how bad things really are…

To sum up my thoughts, I do feel that there is still room on the Dollar’s upside and this should still remain the prime focus over today and possibly a little into next week, but I feel that unless the situation suddenly explodes to the Dollar’s upside we should be wary of just how far this move can extend at this time…

Today’s free analysis is for AUDUSD and can be found on http://www.fx-forecaster.com/DailyForecast.html along with Wednesday’s Trader Package Review & Trade Set up report. (+55 pips)

Have a great weekend
Ian Copsey

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

Wednesday, November 24, 2010

Second step closer to a larger move…

Please note that with Thanksgiving holiday in the States tomorrow the next report will be on Friday


There is probably little need to say that yesterday’s moves have rocked the foundations of my larger Dollar bearish view. I do find this hard to contemplate as the implications are potentially for another rocky ride that we saw from the 1.5143 EURUSD peak… The problem I have is that while the monthly structure could well see a further rally the early stages of the decline in EURUSD would suggest that we have only just begun which would blow away the 1.1879 low with total arrogance.

Forgetting any current fundamental influence and considering price structure, I’m not sure I really find this quite fits. If I have any fundamental opinion it is really that the economies of all industrialized nations are in such a critically bad condition that every single currency should be sold… Clearly that doesn’t solve any problems in terms of forecasting…

For the moment momentum is clearly Dollar bullish. The wave structure is actually difficult to decipher but I’ll err on the side of momentum for now. I am still watching USDCHF with interest as I have always been expecting this to rally, albeit in a correction. There are alternative support areas in EURUSD and GBPUSD and while they don’t really seem to fit into any bearish structure they are still worth observing as a precaution.

What I am seeing through my indicators is a general threat to break weekly Dollar resistance levels that would spark a stronger correction to the Dollar’s losses and maybe total reversal. Given that we shall be entering a period of lower liquidity as we move into Christmas and New Year be aware that the risk could be for some choppy, but overall sustained moves…

For today, with a U.S. holiday tomorrow, there is continued risk of follow-through from yesterday’s rally but even from a structural point of view a correction should develop before long and this would tend to coincide with the lull in trading tomorrow.

To all those celebrating, a very happy Thanksgiving…

Today’s free analysis is for USDCAD and can be found on http://www.fx-forecaster.com/DailyForecast.html along with yesterday’s Trader Package Review & Trade Set up report. (+30 pips)

Good luck
Ian Copsey

FX-forecaster Trader Package now available at €20.00 pm
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Tuesday, November 23, 2010

One step closer to a larger move…

Finding Dollar buying levels finally turned out to be the right strategy although the rallies in EURUSD and GBPUSD were far stronger than I had anticipated. The break above 1.3775 frustrated but in reviewing I see a misjudgment in one leg of the move that had actually been a triangle in the EURUSD rally that forced a higher target. While the breach was not expected the end result is that structural progress remains on track. I still do not expect a new low in EURUSD. However, a new low in GBPUSD is more likely but should be the final stalling point for the larger rally to develop.

What is more confusing is the apparent refusal by USDCHF to respond with the vigor shown by its European buddies. This really does need to buck its ideas up pretty quick as if it moves much lower from current levels I’d have to begin doubting the final upside target… I actually prefer a neutral stance today just to watch what it does and which structure it will follow.

Now, what is of more interest is USDJPY and the crosses. While it didn’t really manage to get any higher than its early Monday morning stretch it has now developed into a more neutral balance in terms of structure. I have been on the sidelines here for some while, seeing an ambiguous structure building up that could spark a move in either direction. If this breaks higher then I feel it is more likely to be outright bullish. If it breaks lower then it has a choice now of further consolidation but more on the bearish side or an outright aggressive bearish structure.

Which will it be? Well, USDJPY is also still poised but seemingly with less upside risk and more downside. Even in the downside I can’t see it driving very far below the 79.70 historic low. On the assumption that EURUSD does indeed rally then the bearish consolidation scenario in the cross would appear more appropriate. If I’m wrong on EURUSD then the downside risk for the cross is substantial. My preference remains for a much stronger EURUSD and mildly weaker USDJPY which could see some losses depending on when USDJPY breaks down – but more likely an eventual recovery… What this love triangle closely…

On AUDUSD and USDCAD I am neutral today and waiting to see which way they break…

Overall, for today and tomorrow I feel we should be looking for Dollar selling levels…

Today’s free analysis is for GBPUSD and can be found on http://www.fx-forecaster.com/DailyForecast.html along with yesterday’s Trader Package Review & Trade Set up report. (+25 pips)

Good luck
Ian Copsey

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

Monday, November 22, 2010

Encouraging progress

It’s tempting fate but I feel the Dollar is beginning to show signs of what I have wanted to see. The recovery in EURUSD has continued while USDCHF has remained supported. It was the relationship between these two which had caused the confusion last week. What we do have now is an hourly bearish divergence in EURUSD while at the same time USDCHF remains above its recent corrective lows. GBPUSD has also seen a solid pullback from Friday’s high which I considered the end of a corrective rally.

This should provide at least 2 days of Dollar bullish pressure still within which I expect a pullback lower in EURUSD but not to new lows while gains against USDCHF and GBPUSD should see new corrective Dollar highs. It is the relative performance of these three which should be the prime focus of the analysis ahead of Thursday’s Thanksgiving holiday. Assuming all goes to expectations this should eventually result in resumption of the weekly Dollar downtrend.

I should point out EURJPY also which has pushed higher nicely. I’m not sure that it should get much further, if at all, before turning in a correction. However, we have to acknowledge that it is still in the recent range and until then some caution is necessary. However, the way things are developing it is beginning to show modestly positive signs of continued strength.

Indeed, caution is advised as the rally in USDJPY has slowed considerably and to areas where a corrective peak can develop. In the slightly larger picture (over the next 2-3 days) we need USDJPY to remain moving in a modest upward direction else any sharp losses would maintain the broad sideways consolidation in the cross.

AUDUSD – my preference is for more losses here but I feel we are nearing a more substantial corrective low that should spur price back into the weekly uptrend. USDCAD – lower for today I think, probably in the larger picture too, but this has been in a range for so many months it’ll be best to keep a balanced view on this one.

Therefore, the main message today is to look for Dollar buying levels…

Today’s free analysis is for USDJPY and can be found on http://www.fx-forecaster.com/DailyForecast.html along with yesterday’s Trader Package Review & Trade Set up report. (+105 pips)

Have a profitable week
Ian Copsey

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

Friday, November 19, 2010

Conflicts

This week has not been a good one. It seems I have been lagging the market rather than leading and that makes me glad the weekend has arrived. Yesterday’s Dollar losses were a risk I could see from the bullish divergences in EURUSD but those in USDCHF and GBPUSD were clearly not anticipated. Taking a step back, in many ways, as I pointed out, the 1.3447 EURUSD low is very much in line with my larger daily/weekly picture of strength. However, what clearly spoofed me yesterday was the fact that we had not seen a strong enough rally in USDCHF to satisfy a minimum daily correction there… The sharp push higher in the latter by the end of the day has actually confirmed that. As for GBPUSD – at this point I’m treating it as a correction with potential downside risk still to come. Whether this makes new lows or remains in a consolidation has yet to be seen but I do not rule this out.

It does look as if EURUSD is approaching a peak in the recovery so it actually suits the Dollar bullish picture expected in the other two Europeans so today should be mostly Dollar bullish. We shall have to see how this pans out as we get into next week as the ideal will be for EURUSD to generate a correction only while the other two risks minor new Dollar highs. If all this occurs next week then I feel the weekly Dollar bearish trend can continue. It could end up as quite a close call but like a stubborn mule I still see Dollar cycles as bearish.

USDJPY spent much of the day in consolidation but ended up at new highs. We are beginning to get bearish divergences here also so we should be aware of the downside risk that could emerge at any time. I do still see risk of another push higher, but the more this happens with sluggish momentum the stronger the risk of reversal lower.

Interestingly the combination of EURUSD and USDJPY has seen the cross rally quite constructively and has begun to resurrect the bullish preference I have had. However, it’s still early days and clearly we’re within the larger range. I can’t see excessive gains today and the proof of the pudding should come over the early days of next week. If I am correct in my bullish EURUSD preference and USDJPY remains sluggish on the downside the environment for further gains is most definitely possible.

So, today look for the final remnants of yesterday’s moves to die out and expect Dollar gains today…

Today’s free analysis is for USDCHF and can be found on http://www.fx-forecaster.com/DailyForecast.html along with yesterday’s Trader Package Review & Trade Set up report. (+70 pips)

Have a great weekend
Ian Copsey

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

Thursday, November 18, 2010

Slow correction but the evidence still appears to point to a higher Dollar still

I was quite encouraged with yesterday’s move, apart from the fact the correction took all day to reach the retracement targets, but with all but USDJPY of the Dollar-currency pairs stalling at the right areas it provides greater confidence in the overall structures. Therefore the basic assumption of further gains today does appear to be valid. If not, we have great break levels…

Having taken a longer look at the daily charts all round yesterday I am coming to the conclusion that this may yet still be just a deeper retracement within the larger weekly Dollar downtrend. There are a few technical reasons for this in terms of price development and if I can venture into the realms of Elliott Wave the issue for me is alternation. For non-Elliott Wavers this is an observation, though not cast iron, which suggests that within the 2 corrective waves between 3 directional waves there should be one that is deeper than the other.

Looking at the hourly decline in EURUSD the retracements have all been shallow which tends to push the risk towards a corrective structure. Equally, looking at the daily decline from 1.1730 USDCHF the same is the case – but the move higher now appears to be a deeper pullback within the second corrective structure. Potentially another indication is yesterday’s failure for USDJPY to push above the 83.58 high, this being a corrective retracement area. However, this still may not be the final corrective high.

So the underlying message for now is basically the same as yesterday. Continue to favor the Dollar upside for now. There does seem to be further to go but I hazard a guess this could be quite choppy. Keep yesterday’s Dollar corrective lows, or around there, as the points that could generate resumption of Dollar losses. At this point though I still feel short term momentum remains higher.

Today’s free analysis is for EURUSD and can be found on http://www.fx-forecaster.com/DailyForecast.html along with yesterday’s Trader Package Review & Trade Set up report. (+45 pips)

Good luck
Ian Copsey

FX-forecaster Trader Package now available at €20.00 pm
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Wednesday, November 17, 2010

Fog on the road ahead… but the wheels are still pushing the Dollar higher…

That’s settled then… 1.3557-70 EURUSD has broken, USDCHF has taken out (marginally) the 0.9970 high and GBPUSD has fallen below 1.5950… I can see bullish divergences in EURUSD but the picture is not the same in USDCHF and GBPUSD and therefore the stronger risk remains Dollar bullish.

Do I see this as a clear and definite signal for sustainable Dollar gains? Probably… However, while I took a long look at the daily charts and the structure of what we have seen so far I still cannot recognize the structure. From the 0.4281 high the decline in EURUSD has been too direct so far, corrections limited, and to an extent that suggests one of two things – either this is still a correction since corrections within corrections can be brief, or we need a deeper pullback at some point to balance out the structural development in a directional move.

However, that aside, momentum is Dollar bullish. It doesn’t rule out a correction but probably means they should be brief once again. For today I’ll concentrate on some areas which I feel have potential to generate a correction and then make a judgment from the reaction. At this point too I’m not going to totally abandon the Dollar bearishness I have preferred but admit it is more as a precaution than from any strong view.

If I have any relatively common view, then it is for a brief pullback to yesterday’s moves and then an extension. From these points I hope to be able to judge the structure and generate targets. However, I do feel over the next day or two we’ll be seeing a slightly deeper pullback.

I have found the wave development exceptionally complicated today and therefore please take care at all times. Today is one of those days where I don’t have enormous confidence in the support & resistance and therefore trade set ups should be utilized.

Underlying risk for today is therefore Dollar bullish and this is the side that should be preferred.

Today’s free analysis is for AUDUSD and can be found on http://www.fx-forecaster.com/DailyForecast.html along with yesterday’s Trader Package Review & Trade Set up report. (+0 pips)

Good luck
Ian Copsey

FX-forecaster Trader Package now available at €20.00 pm
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Tuesday, November 16, 2010

Monday blues…

I wish I could start the week again… Yesterday didn’t see much that went to plan – just USDJPY really and maybe USDCHF. The Europeans were lethargic and mainly driven by a modestly bullish Dollar that caused a deeper correction in GBPUSD, saw USDCHF advance into the resistance area expected but EURUSD… a drop below Friday’s low… exactly what I had not wanted to see occur…

So, as I wrote yesterday, does this mean the Dollar downtrend has completely reversed? Well, it has to be seriously considered… From a structural point of view the decline from 1.4281 EURUSD is now looking strained in terms of what I would expect. However, what has occurred this morning is a slowing in momentum that has allowed hourly momentum to develop a bullish divergence while the 4-hour divergence remains intact… Equally, USDCHF is now seeing bearish divergences as does USDJPY…

The additional confusion is that USDCHF has developed these divergences at levels that suggest it to be in a potential sideways consolidation. GBPUSD has gone into a neutral pattern. Therefore, I would rather allow for myself to have made a possible error in the structure in EURUSD but take a more neutral view until the mess is sorted out. Indeed, in terms of the correction in EURUSD it is still above a Fibonacci support level at 1.3557… It will also therefore mean that we are going to have to look for break levels which always add a larger risk of being caught on pullbacks.

Thus, today the analysis will be rather defensive but given the circumstances it is probably the best option. I don’t think we’re going to get a sharp resumption of Dollar losses today but hopefully we should get more clues from the developments seen.

Today’s free analysis is for USDCAD and can be found on http://www.fx-forecaster.com/DailyForecast.html along with yesterday’s Trader Package Review & Trade Set up report. (+90 pips)

Good luck
Ian Copsey

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

Monday, November 15, 2010

Basically I look for Dollar losses but risks are for mixed bag today…

For me EURUSD is basically the crucial currency pair to watch. Its low on Friday was sufficiently close to the 1.3577 support for me to call this a successfully completed pullback. It bounced nicely from here and if we are to see my larger bullish structure to be fulfilled this low should not be broken. This level should not be under-estimated as breach will threaten to break the entire structure I have been following for the past 3 months…

Therefore, we should be watching for gains to develop which in the early stages could take on a structure that would fit into either bullish or bearish medium term patterns. This means there is still a lot of work to be done to watch how the expected recovery develops. GBPUSD appears to have a more bullish outlook which supports the idea that we should be seeing Dollar losses. The pair that holds more confusion is USDCHF where I still see potential for gains. This is definitely more of a conundrum and may even subside into a sideways consolidation…

Friday’s pullback was to the deepest I had expected. Either this has to start powering higher or the rally will soon peter out. The way I see it at the moment is for gains to be seen initially but then we’re going to have to be aware of the pivotal area that divides the stronger bullish rally and a possible end to the correction from 80.23… There’s not too much assistance offered by EURJPY. It bounced from the higher support on Friday, and stronger than I had expected but this actually added an unknown ingredient that could still see partial follow-through higher only to reverse sharply lower. In the daily picture the cross is still poised between two scenarios. I do feel this may well point to what will happen in general to the Dollar but this current hurdle needs first to be navigated.

The next problem is that the Aussie is looking a bit soggy at the edges and I’m not particularly keen on a bullish structure. This adds to the inconclusiveness of the general Dollar outcome. USDCAD seems more to point to a short term consolidation…

So for today, with certain barriers to overcome, I feel we should see a Dollar negative day but be aware of the key Dollar support areas and Friday’s low in EURUSD…

Today’s free analysis is for EURJPY and can be found on http://www.fx-forecaster.com/DailyForecast.html along with Friday’s Trader Package Review & Trade Set up report. (+230 pips)

Have a profitable week
Ian Copsey

FX-forecaster Trader Package now available at €20.00 pm
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Friday, November 12, 2010

I’m not 100% sure that I like what happened yesterday

Wednesday left me feeling the Dollar had performed basically as expected. The drop to 1.3627 EURUSD is pretty much in line with my targets. The direct recovery in GBPUSD from 1.5952 was not quite what was expected but could be seen as more in line with the bullish stance. The correction in USDCHF which extended to new highs was a possibility which I had tended to feel was unlikely. Moreover it has produced a potentially bullish structure.

What is a little more concerning is that bearish momentum in EURUSD has become stronger with the hourly bullish divergences breaking and even as I write I see that it has broken below my lower target at 1.3622… That doesn’t really fill me with confidence.

What is more, the rally in USDJPY has developed in a manner that also looks quite bullish… but EURJPY tends to provide me with a more bearish feel… I can’t see this dropping through the floor right now but does risk further losses while the bullish expectations in USDJPY do appear to face resistance not too much higher than current levels…

If the outcome develops against my original view then we are facing a completely alternative structure, one mildly Dollar bullish in the near to medium term but if this turns more significantly higher then the upside risk does rise considerably. By that I mean there is chance we could drop right back down to 1.1879 again… later below. I’ll take this step by step as we are in the twilight zone of the twist in structure but raising this now should warn us to take care until stronger signals are generated.

While I do take no notice of fundamental releases in terms of my forecasting it is folly not to be aware of the G20 meeting underway and as such could be a short term irritant or a more significant catalyst with the end result of lots of politicians bitching and positioning themselves to retain a weak currency. Thus, until the clash of handbags and scratching of eyes subsides it is clearly appropriate to take a neutral view given the potential breakdown of the short term structure…

Today’s free analysis is for GBPUSD and can be found on http://www.fx-forecaster.com/DailyForecast.html along with Wednesday’s Trader Package Review & Trade Set up report. (+40 pips)

Have a great weekend
Ian Copsey

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

Wednesday, November 10, 2010

We should see the end of this Dollar pullback today

Please note that tomorrow is Veteran’s Day Holiday in the U.S. so the next report will be on Friday


Yesterday’s price movement provided some good clues that should provide us with a conclusion to the Dollar bullish correction which started last Friday. I can’t say in the longer term picture I’m brimming with confidence since the Dollar bearish targets do not appear to be particularly synchronized, at least at this stage. However, there is a long way to go still and at this point the resumption of the larger downtrend some appear imminent.

However, focus today must be short term initially but with the prospect of being able to establish some Dollar short positions that could prove to be quite healthy.

The very start of today, around the NY twilight zone before Asia had fully opened their eyes saw some Dollar losses. This should generate a correction in Asia but probably by early European time the final Dollar highs seem likely. Perhaps this can be delayed a little this outlook does look basically like being the general development. Certainly, the Europeans appear to be in concert. GBPUSD concerns a little as the correction has been modestly deep and momentum not looking exactly ready for a bounce so we have to play that one a bit more carefully.

Perhaps the bigger surprise was USDJPY which stormed higher at the end of the day to retest the 81.97 corrective high. This one has obviously been a difficult one to follow due to the general movements divided into minutia which makes wave relationships tough. However, while I can see a pullback in Asia this actually looks bullish also… Given the propensity to move sharply and then subside into narrow ranges I don’t want to get too ahead of myself, but this does appear to have the potential for further gains.

Again, where the move may come once again is in the cross. This too has come to a critical juncture but one where the downside looks limited – for now at least – and a correction due from new lows that should be seen today. It seems logical that a pullback lower in USDJPY and the anticipated extension in EURUSD could provoke this follow-through but a combination of them both rallying could generate a solid pullback – so take care.

The Aussie looks like being close to a corrective target and ready for a push back higher. USDCAD…maybe this can rally too… I’d still play this one with caution though…

Today’s free analysis is for USDCHF and can be found on http://www.fx-forecaster.com/DailyForecast.html along with yesterday’s Trader Package Review & Trade Set up report. (+205 pips)

Good luck
Ian Copsey

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

Tuesday, November 9, 2010

More of the same… or resumption of Dollar losses?

Yesterday provided a few more clues. At least we can almost certainly put the Euro triangle to rest as a probable figment of our imagination. I say probable since while the triangle high was penetrated it is not impossible for a retracement to mildly penetrate the boundaries. It is probably this which is the source of any uncertainty today. There is an hourly bullish divergence so the potential for the pullback to be complete is most definitely present.

The key is more in what the rest of the Dollar currency pairs are suggesting… To be honest there is no definite answer here. Very clearly the Euro outstripped all other currency pairs to leave them looking more as if they have suffered a mild correction. There is even some potential for this correction to deepen just a little more and this is more my preference. The other issue to face is that EURUSD has a lot farther to move to reach its target compared to the other two Europeans… I have to admit this is something that remains nagging in the back of my head…

So we’ll have to start today with continued caution and try and recognize the flow, where the market has more weakness. It has started with the Euro seeing some losses and where this next stalls will be critical.

Another clue to look for is how EURJPY develops. It saw quite a solid pullback on the tail of the bearish Euro yesterday and has retraced a fair part of the rally from the 111.51 low. This really does appear to be at a critical juncture with conflicting daily & weekly indications. I have struggled with this for some time, seeing the potential for a move to 100.40 but finding the underlying Dollar weakness against the Euro to be a dampening factor for such an outcome.

Thus, while there are a few alternative structures here, unless USDJPY resumes a more aggressive decline, I’m not yet convinced that the cross is going to die at this point…

The Aussie looks a little range bound. USDCAD is beginning to display a resistance to the recent losses…

Today’s free analysis is for EURUSD and can be found on http://www.fx-forecaster.com/DailyForecast.html along with yesterday’s Trader Package Review & Trade Set up report. (+45 pips)

Good luck
Ian Copsey

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

Monday, November 8, 2010

Off track…

Friday wasn’t meant to happen… It has cast a lot of doubts in my mind and also a lot of conflicting structures. The break of support in EURUSD and the depth of the decline really made the bullish structure look exceptionally doubtful. The immediate implication implies a decline all the way back to the 1.3696 low and a bit beyond… Cripes…

But before I went too far it should also be noted that the 61.8% pullback of the 1.3863-1.4281 rally falls exactly at Friday’s low at 1.4023. Therefore to confirm the structure the immediate thought was to check against USDCHF and GBPUSD… I mentioned last week that I found it hard to identify a decent structure in USDCHF… and a corrective one appears a better bet. However, conversely it is tougher to achieve a bearish GBPUSD structure.

So I ended in a Catch 22 situation… Next stop in the checks was the overall momentum position. Here I found it hard to see any Dollar bullish divergences that would suggest that a total recycling is imminent. Well, they don’t always occur so it’s not a conclusive solution…

So the end result of these checks remain inconclusive but until the broader Dollar swing highs are broken I have to assume we are still on course for losses… but keep the doubts in the back of my mind to try and identify just where the bearish move breaks down. Therefore, take the early stages of the day with care and note the key areas that would sway price one way or the other…

Even USDJPY proved slightly stronger than expected. In some ways I am less averse to some Dollar strength here but this entire structure has been so erratic that the structure here is not straight forward either. It won’t take too much to bring it back into the recent range which is probably the safer assumption. However, do be aware that any break above 81.47-57 would push it higher.

That’s not such a wayward possibility as EURJPY also deviated from expectations on Friday. However, this could well provide a more bullish outlook that would suit both higher EURUSD and USDJPY… Again, break levels for a move back lower are not that far away but until Friday’s low breaks the upside does still seem to hold sway…

Today’s free analysis is for USDJPY and can be found on http://www.fx-forecaster.com/DailyForecast.html along with Friday’s Trader Package Review & Trade Set up report. (+40 pips)

Have a profitable week
Ian Copsey

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

Friday, November 5, 2010

On track…

I needn’t have considered the possibility of extended consolidation yesterday. The Dollar has taken the more direct route and the downtrend is back on track. There’s still a long way to go in the larger picture but I suspect we’ll reach the half way mark by the middle of next week, just in time for the U.S. bank holiday on Thursday.

For today there is still further to go in the current leg but a correction will be due probably by the end of today which should last through to Monday at least to set up the final leg higher to the half-way mark as mentioned above. This basic pattern extends across all Dollar currency pairs with the exception of USDJPY it seems.

Indeed, USDJPY did falter and was dragged lower yesterday. I do remain bearish here though the speed of the decline I find a little uncertain. It’s possible we’re still in a sideways consolidation here but the pace of moves remains staggeringly complicated with horrendous microscopic adjustments interspersed with moments of sheer panic and terror that must be similar to how President Obama feels…

Many of you will know that I have been very, very bearish for a long time and that will not change for another 2 years. However, the structure of the decline has been rather a nightmare. Most comments I see are generally on the lines of: “how can USDJPY go down as the exchange rate is already killing exports.” It does seem to me that more emphasis is on the crosses as the Dollar is generally weak across the board.

I can only point to EURJPY as a proxy at this point as it seems most JPY plays are through the crosses these days. Yesterday saw gains extend in the cross but I don’t think this is complete yet. As with the expectation of another rally in EURUSD the prospect is the same for the cross rate. However, it does also seem to be coming to a point where a deeper correction is due and that is when I feel there may be room for USDJPY to finally pluck up the courage to retest the April 1995 historic low.

So the emphasis today is on the Dollar’s downside across the entire range of currencies, the potential for USDJPY to be the exception, before a correction higher by the end of the day and probably extending into Monday.

Today’s free analysis is for EURJPY and can be found on http://www.fx-forecaster.com/DailyForecast.html along with yesterday’s Trader Package Review & Trade Set up report. (+65 pips)

Have a great weekend
Ian Copsey

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