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HARMONIC ELLIOTT WAVE

Friday, January 29, 2010

I think I’m Dollar bullish… but don’t see strong follow-through today…

The bounce from 1.3935 EURUSD may have been from one of my targets but if it was to turn into something stronger I think it would have held and this morning we’ve seen that support break. So all eyes are now on the next supports but I don’t really see much prospect of significant Dollar gains today. I’ll outline the resistance levels to watch out for in the individual analyses today from where I anticipate a pullback.

Once this pullback is completed I’d anticipate the bearish flag target in EURUSD to be met next week – even if it’s a week late – around the 1.3652 area – and that should equate to either 1.0727 in USDCHF or a small risk of 1.0813… This should keep the downward pressure on GBPUSD but I don’t think we’ll get a break below the 1.5832 low… That’s a bit touch & go depending on how the entire correction develops.

However, this should also impact on the JPY crosses, all looking bearish, but again limited in the short term. There will probably be a bit of messy consolidation once the lows have been reached as we face USDJPY still in an overall downtrend but risking a near term consolidation within the 89.13-90.54 range.

AUDUSD is facing some key support levels too while USDCAD has some overhead resistance around 1.0784-94 and maximum 1.0841. Thus the bigger picture is tending to slot in with each other.

Thus, for today, take care of the current follow-through in the Dollar. Watch for some bearish trade ste ups that should trigger a correction into Monday and possibly Tuesday before the next legs higher…

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 up reports (+85 pips) and the review of the support & resistance levels issued in the daily report and FX-forecaster Trader Package.

Have a great weekend
Ian Copsey

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Thursday, January 28, 2010

The Dollar is rallying but making hard work of it…

There seems to be an unholy battle between Dollar bulls & bears and from a few discussions I’ve seen this is representative of the two camps in the debate. At the end of the day something’s going to give way or the other. Without a doubt, once the debate is settled there will be a strong movement and to anticipate the sort of implications I’d go for 1.57-1.60 EURUSD if the Dollar resumes its losses but if it extends its rally through 1.3898 and 1.3820 then I’d go for around 1.26-1.27… so it should be a decisive moment.

At the moment, while I’m rather unsettled about the momentum picture which hasn’t yet screamed from the roof that there is going to be a reversal lower in the Dollar, the picture I still have is a move through to around 1.3898 EURUSD and 1.0609 and possibly 1.0641-67 USDCHF. The picture in GBPUSD is a little mixed but even that could do with one more dip.

What is just a little confusing is the path it will take to get towards these targets… and then, assuming I’m correct, we’ll have to assess the momentum picture then. Certainly the wave structure has become pretty choppy and just a bit difficult to get a clear picture of the approach and thus it’s probably going to be easier to watch the Dollar resistance levels when they come.

Success was seen in USDJPY which bounced from 5 pips above the 89.08 support. I still feel this is just a correction and we’ll see losses develop once the correction is complete. This is being reflected in the JPY crosses which themselves had been losing their way in the decline. Again, as far as I can see there are still losses to come in the crosses and these could be quite substantial but today I feel we have a day when we’ll see them recover a little more in a correction before the next leg lower.

The Aussie still seems to have a little way to go but watch the 0.8860-80 area while AUDJPY probably has further to go to 79.25 and maybe even 78.83 once USDJPY resumes its losses. This may well provide USDCAD with the opportunity to follow-through to the 1.0747-84 area…

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 up reports (+40 pips) and the review of the support & resistance levels issued in the daily report and FX-forecaster Trader Package.

Good luck
Ian Copsey

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Wednesday, January 27, 2010

Creaking on the edge…

It was always unlikely that the market would choose a direct follow-through lower to confirm a larger reversal. However, it hasn’t broken the recent Dollar highs either and thus we are overall left in no-man’s land awaiting a break. Indeed, the weak bullish divergence I had pointed out in the daily EURUSD chart has become even weaker with yesterday’s decline and the next two days will see solid gains fall out of the equation and that will threaten a push lower in momentum. Therefore, if the divergence is to be preserved as it is now we’ll need the Dollar to head lower quite promptly from now…

Never say never… but somehow it looks unlikely. I was trying to find a clear consistent indication across the European currencies but frankly they are all reflecting the same situation and from short term momentum I have to say that the Dollar looks more bullish than bearish. In addition the JPY crosses all look pretty soft. I have to say the structure there is really quite complicated right now but the weakness was the stronger impression. While I can see some of that coming from USDJPY, like yesterday, it was a combination of both sides of the cross constituents.

However, since we are at a critical pivotal point in the wave structure we should keep our minds open to anything and I’ll detail the break areas on both sides. Even if the Dollar does rally today I can’t see it following through the additional 400 pips in three days to reach the daily bearish flag target and I still see support in EURUSD around 1.39 which could see USDCHF reach 1.0609 so I feel we should control any excessive bullishness at this point.

So the basic message today is once again be more cautious but take note of break levels and implications.

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 up reports (+120 pips) and the 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
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Tuesday, January 26, 2010

So far the Dollar has refused to rally…

The market’s enthusiasm has been less than enthralling. We now have 4 days for the daily bearish flag to extend losses by another 500 pips, two days of a fledgling daily bullish divergence and a test of the maximum retracement in EURUSD at 1.4192… Will it break… won’t it break…

To be honest it’s touch and go… but I don’t think so… quite yet…

Move of the day came from GBPUSD which failed to extend losses but rebounded earlier than I thought it would. However, this has approached the 1.6283 swing high and I have doubts that it will break directly. Thus, I feel EURUSD will back off from 1.4192 as well. Let’s see how it goes as the situation in both GBPUSD and EURUSD remains a little fluid and even in the former I can’t rule out another low below 1.6076.

Hence I am slightly more biased to the Dollar upside today and we’ll have to see how this develops to judge whether it provides a pullback only or a final push to those lower levels I mentioned yesterday. However, the confidence that we will not see the bearish flag target approached is growing and more the focus for me will be on how momentum develops – will the fledgling bullish divergence deepen or start declining again that would threaten the downside more…

Of course, if I’m wrong on this Dollar bullish view the break levels remain at 1.4192 EURUSD, 1.6283 GBPUSD and 1.0362-73 USDCHF… If these break the larger Dollar downside becomes a growing risk…

Elsewhere USDJPY has failed to make any decision at all. There is still room for a small additional move higher and yet still remain within a bearish structure. Possibly this will dovetail with what happens in the Europeans. However, the JPY crosses were stronger than I had anticipated but with GBPJPY close to the 147.21 swing high any breach would extend the gains just a little more. I still feel this should be more affected by the anticipated weakness in GBPUSD with that 1.6283 swing high being the key resistance.

AUDUSD remains in a sideways consolidation and this tends to keep it more on the defensive which is also similar to AUDJPY. It seems one of those crucial points where it should confirm a break one way or the other pretty soon – so follow breaks – and watch the implication in the crosses.

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 up reports (+75 pips) and the review of the support & resistance levels issued in the daily report and FX-forecaster Trader Package.

Good luck
Ian Copsey

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Monday, January 25, 2010

I feel that by the end of today or into tomorrow we’ll see a Dollar high

The near term puzzle over whether we’re going to see a major Dollar high or a much stronger rally continues. To be honest, I think this is more of a medium term puzzle as even if the Dollar is going to strengthen considerably I am not really sure it will do so directly.

I’ll just list a few factors that are impacting EURUSD.


1. There appears to be a daily bearish flag. The first leg of the flag took 3 weeks. Since the 1.4578 high 2 weeks have passed and therefore we have just this week to decline to the target at 1.3620. That’s a drop of 500 pips from the current price (a larger weekly range than last week.)

2. Momentum is still a bit fragile. On a 14 day RSI today, if we have a higher close than Friday today then that will provide 2 positive days, but clearly the opposite is true of a lower close. AS things stand now there is (just) a bullish daily divergence, but it’s very weak.

3. My ideal target was at 1.4014 and last week’s low was at 1.4028. There is a lower pullback target at 1.3820 though I find it hard to generate a target from the current wave structure that reaches that far. The most I would expect is at 1.3885…

4. From the 1.4578 high there was a projected target at 1.4020. (again ref the 1.4028 low.)

5. From 1.4028 there has been a series of higher highs and higher lows – ie an uptrend – though it’s not that pretty. Normal maximum retracement resistance is at 1.4190 and on Friday we reached 1.4181.

6. The daily Dollar cycle high was due at the end of last week. The only problem is that these can be a little temperamental so require confirmation from other areas.

As a summary, basically we require a break back above 1.4200 to suggest the current downward move is complete and this would also imply that the decline from 1.4578 is complete which in turn, in my book implies the entire correction from 1.5143 is complete and at an almost perfect retracement target which I set out just after the 1.5143 high.

Short term momentum has not shown a conclusive reversal and there is still some downside threat and this is what we need to watch carefully today. Indeed, I feel that we must see losses today to retain a bearish stance but unless it gets below the 1.3885 area we have to remain cautious about any further losses.

The only concern I have is that USDCHF did not manage to break above 1.0506 to the preferred minimum target at 1.0609. Here the break level (as 1.4190-00 is in EURUSD) is at 1.0339.

These should be the guiding factors to look for today…

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 up reports (+27 pips) and the review of the support & resistance levels issued in the daily report and FX-forecaster Trader Package.

Have a profitable week
Ian Copsey


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Friday, January 22, 2010

Stop the bus… I want to get off…

In some ways yesterday was quite successful. I picked the top in USDJPY within 4 pips, EURUSD reversed from within the buy support area and USDCHF did move higher but didn’t quite meet my resistance and reversed… I could continue my argument that we should see a high in the Dollar. Indeed, nothing has gone particularly wrong with any of them in terms of daily retracements but yesterday’s developments elsewhere have been less than encouraging.

The main currency upon which I had been basing some of my views – GBPUSD – crashed through supports and destroyed the structure I was watching. It gave me some good calls, but yesterday’s break really begins to make this look a lot more bearish. Coupled with the fact that momentum in EURUSD in particular is really looking shockingly bearish I have to place a lot more caution on the Dollar bearish scenario.

In some ways we are still in a twilight zone between bullish & bearish and I don’t think it’s going to be totally one way traffic so we’ll have to retain an open mind now and react as developments occur. In fact, we must also be aware that we may just be seeing the second leg of a daily bearish flag in EURUSD and if that’s the case then retracements are going to be very limited indeed…

The next point of concern is the JPY crosses which have also tumbled quite strongly. There are signs of a correction but we’ll have to keep our eyes on these also as they could drag the constituent currencies with them if they continue a sharp fall.

Anyway, for today I think we’re going to see some corrections to the moves seen this morning and depending on when targets are met the danger of follow-through probably won’t occur until the second half of the day and may even hold off until Monday.

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 up reports (+110 pips) and the 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, January 21, 2010

The momentum behind the Dollar’s gains is strong but there are signs of slowing

It’s a bit of a strange market right now. One look at EURUSD and it’s hard to stick with my view that we should soon see a reversal. Momentum is pushing extremes and it really made me look hard at the structure to make sure I’m not kidding myself. USDCHF is doing its best too and the momentum picture is pretty bullish too. However, it hasn’t made a new high yet.

So I’m wondering to myself whether I have really got this wrong. There does seem to be an awful lot of Dollar bullish folk out there – or at least where I see comments – and with momentum so strong it would be churlish to ignore it. Indeed, as always we have to be aware of what happens if a view is incorrect.

By the end of the analysis I was feeling a little more comfortable with my basic view. There are still things that can go wrong but GBPUSD worked like a dream yesterday and unless we see too much more in the way of losses the structure I have been following is holding rock solid and this still points higher…

And while I do think we’re going to see the Dollar make gains I also feel we are close to a more sustainable correction. The 1.4014-38 area looks supportive in EURUSD while the 1.0506-18 area looks like holding in USDCHF. Both areas look like they can generate decent corrections and enough to bring momentum back under control – then we’ll have to watch the subsequent follow-through.

I’m a bit concerned on EURJPY but for the other two JPY crosses I see potential for gains, clearly GBPJPY riding on the back of GBPUSD but AUDJPY hit a key support yesterday and has bounced too. The only issue I have is that AUDUSD seems to have a little more to go on the downside and thus there is a suggestion we’ll see USDJPY higher. However, I can’t see the latter getting above 92.24…

So overall, while I see some room for minor follow-through in the Dollar’s rally in the first half of the day I feel that by the second half we’ll see a decent pullback that should last through to tomorrow at least and possibly see the Dollar begin to rally into the weekend.

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 up reports (+20 pips) and the 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
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Wednesday, January 20, 2010

It looks like we’re seeing a direct move to what I feel will be final Dollar highs…

The suggestion that GBPUSD should be observed as it tests 1.6436-47 to judge quite what EURUSD will do proved to be a successful strategy. The Pound made its way up to that resistance and just a bit more, signaled its reversal and that triggered the gains in the Dollar across the board.

This is going to provide an interesting backdrop as GBPUSD hasn’t yet reached its eventual upside target. However, today should be more on the soft side as the correction doesn’t look complete as yet. In the larger picture what I see happening to GBPUSD is a final move higher over the next day or two, a modest correction (in the daily chart, so a significant amount) to complete its sideways consolidation and then see a thrust higher.

Now, as yesterday, but on a slightly larger time frame, we have to fit this in with EURUSD and consequently USDCHF. Already we have seen a direct follow-through of Dollar gains which has penetrated the 1.4217 low and yesterday’s high in USDCHF at 1.0384. This does seem more consistent with a direct follow-through and considering tomorrow is the ideal Dollar cycle high this quicker break than I anticipated looks appropriate…

Thus, it looks like we should be favoring Dollar gains – but we’ve got to navigate around the situation in GBPUSD and that a possible headache. Certainly it’s a day for watching cross currency plays.

That leaves USDJPY which failed to see the anticipated losses and has entered a twilight zone where several things can happen. I think I’d prefer to be guided more by the JPY crosses here as these seem to be entrenched in a corrective pattern that is not yet complete. I sense these are setting up a strong break higher and that should be a factor of the eventual reversal lower in the Dollar once we have reached the retracement targets from 1.5143 EURUSD and 0.9909 USDCHF.

Since this will take another 1-2 days at least during which time the JPY crosses should remain in ranges but with a slight downward bias over that period (although GBPJPY could be the dissenter) it tends to suggest that USDJPY will tend to match the general moves in Dollar-Europe. However, my overall view is bearish for USDJPY and the next few days is more about seeing the correction develop…

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 up reports (+73 pips) and the 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
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Tuesday, January 19, 2010

With some conflicts around I think it may be worth sitting and observing for the first half the day

I approached the analysis this morning with the expectation of seeing further Dollar gains after the breaks of resistance levels seen on Friday. However, I finished the analysis with quite mixed impressions across the currency pairs… First of all it is tough to align EURUSD with USDCHF but the initial Dollar support levels seem fairly correlated. I see strength in GBPUSD, initial weakness in AUDUSD ahead of gains and losses in USDCAD before gains.

So I took a step back and looked at the broader picture to consider the possibility that the Dollar’s burst higher on Friday could merely be a correction. I could certainly see this as a possibility as the recovery from 1.4217 EURUSD has developed in a manner which would allow another rally and still remain within a bearish overall structure. In some ways I tend to prefer this from a structural point of view but not from the perspective of time as the daily Dollar cycle high is due over the course of the next week…

I ended up more viewing GBPUSD as a possible “template” to follow. It’s not perfect as there is a degree of non-correlation at the moment. However, here I am more firm in my expectations – which are for a move to around 1.6440 before a correction – but a correction only. Equally, I expect USDCAD to dip to 1.0134 before higher but again this currency tends to do whatever it wants rather than maintain correlation with other pairs.

So the next thing to look at is USDJPY. I am more convinced that we have a general downtrend here now, albeit quite choppy and I feel this could eventually reach the 89.74 level at least with an outside chance of 89.19-29 over today/tomorrow. As a consequence we’ll have to observe the JPY crosses with important support in EURJPY at 129.70 which, while it holds could see a reversal higher. This should match with support in GBPJPY around 146.83 (at most 146.37) and in AUDJPY between 82.39-77.

Thus, given the high level of uncertainty and the need to match movements across the board I do feel that unless clear patterns and trade set ups occur, it may be better to sit & watch and see how the cross-correlation between support & resistance levels match up, noting key break levels that should extend any particular direction move.

Hopefully, by the end of today the picture will be clearer…

Today’s free analysis is for GBPUSD and can be found on
http://www.fx-forecaster.com/DailyForecast.html along with Friday’s trade set up reports (+0 pips) and the 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, January 15, 2010

Except for the risk of continued consolidation the market must choose its direction soon

I was pretty convinced that yesterday would see a break one way or another but clearly the “collective mind” of the market just couldn’t commit itself to either bullish or bearish Dollars. Therefore today we remain in the same position and awaiting a stronger catalyst to send it one way of the other.

So far this year I have highlighted an expected Dollar cycle high and the estimate was next week. Well, daily cycles have a variance band around them – they can start early or indeed late – and thus we are still within that variance band and as bearish Dollars as I prefer to be at this time the chance that we can see once last decline to the 1.4014 area EURUSD cannot be totally ruled out.

As I mentioned yesterday, the break levels are relatively clear within a fairly narrow range but I still feel the greater risk is more directly Dollar bearish. However, even counting this as a more complicated corrective pattern, there is little room for much more consolidation and thus the break is not that far away. Do watch out for those break levels as if Dollar resistances break the follow-through back towards end year highs should be quite swift.

Even USDJPY has been making life tough… However, here too I feel the downside has more attraction. The JPY crosses appear to be stalling back in a trading range and assuming the Dollar will be bearish it does imply limited impact for the crosses. I took a long look at the crosses this morning and after a while of basically considering a more bearish view I feel the lack of downward follow-through has begun to provide a more bullish structure. This tends to fit in with my basic view for the coming months that the Dollar losses against the Europeans will outstrip those against the Yen. Therefore it implies strength in the crosses. For now I feel it will be limited and probably see more choppy range trading characteristics but keep these in mind.

I feel the Aussie looks stronger but watch the 0.9262 support and USDCAD, while overall bearish, seems to require a correction before the next leg lower…

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 up reports (+150 pips) and the review of the support & resistance levels issued in the daily report and FX-forecaster Trader Package.

With Monday being a bank holiday in the U.S. the next report will be for Tuesday's trading

Have a great weekend
Ian Copsey

NEW!! FX-forecaster Trader Package now available at €20.00 pm
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Thursday, January 14, 2010

Yesterday was a wash out so we now need to look for follow-through lower today

All best plans laid to rest… Just as I thought the market was going to decide to resume the Dollar losses it decided to recycle the correction instead… That leaves EURUSD and USDCHF very much as I described yesterday with one or two tweaks to the support & resistance. Overall I still feel the stronger indications are Dollar bearish. That doesn’t mean we can see it make some minor gains early today, but while they are contained we should find that they’ll follow the lead of its European compatriot GBPUSD.

Indeed, even GBPUSD continues to look bullish. It too probably needs a small pullback early today before it sets on its way higher. Thus, all round the mood looks Dollar bearish but there are clear break levels if I’m proven to be wrong… I’ll detail these within the main text of today’s analyses…

Along with a bearish Dollar against the Europeans the same can be said for USDJPY. Yesterday’s correction was just a little more than expected but overall it still looks good for losses with the same two potential targets at 90.40 and 89.89.

Now, where things appear to have diverged from my expectations is in the JPY crosses. They do look on the whole bullish after yesterday’s rally. What I find just a bit difficult to judge is whether this will develop directly or whether we are going to see more sideways consolidation. Clearly, if the Dollar loses out all round it will have a more limited impact on the crosses. The key will be how quickly the European currencies gain against the Dollar versus Yen against the Dollar. I suspect USDJPY will be slower to decline and this may well favor the upside.

Thus, in the crosses we’re going to have to note key break levels and keep an eye out across the individual currency pairs to judge how things will develop.

AUDUSD played some little games this morning. It needs to break above this morning’s high reasonably quickly else get sucked into range trading.

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 up reports (+135 pips) and the 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, January 13, 2010

I think today will provide us with a more definite indication of the Dollar’s status

Yesterday saw a lot of things go well initially but then fade. It’s not that anything has gone drastically wrong but my expectations of the subsequent follow-through never developed. I have had a good scour around and I have to say that overall I am edging more strongly towards the Dollar reversal scenario. It’s not going to be completely one way if you’re looking from a short term point of view but I feel the break levels are going to be quite clear when (and if) they come.

Therefore, while the Dollar resistance levels I gave yesterday for the Europeans worked very well, I feel we’re likely to see a slightly deeper pullback today – not by too much – maybe another 20-40 pips – but while those Dollar resistances hold the side with the more complete matching projections remains on the Dollar’s downside. However, once these losses have been see there is likely to be another pullback before the main break lower is confirmed.

On the day, as I warned yesterday, USDJPY led the way and pushed below the 91.25 corrective low decisively and that indicates to me that we’re on our way lower here. The Xmas/New Year period played havoc with momentum indicators and failed when we needed them most.

However, while this tends to suggest we’ll have the Dollar losing out in general I’m not really in favor of a break below 84.82 here just yet since the cycles appear to suggest a more sustained sideways consolidation for a little while to come. This should prevent the JPY crosses from declining too far and I can see these becoming a little erratic – I feel we’ll need to take some care.

So overall today I’m looking for a marginal new corrective high in the Dollar followed by some solid losses again.

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 up reports (+100 pips) and the 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
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Tuesday, January 12, 2010

The Dollar’s losses look constructive but there’s still a little more to go to confirm…

Yesterday was a mixed bag really… some parts good and some rather ambiguous. If I get any general impression it is that the Dollar has resumed its long term downtrend. The only thing that immediately comes to my mind is the timing for that next Dollar low which should ideally occur in April though I see some conflict with a later timing in USDJPY. The target for EURUSD should be around the 1.60 high approximately so for an April time target a rally in EURUSD beginning now more-or-less has a good chance of reaching the time/price target…

The counter argument is that we’re merely seeing a pullback in the Dollar rally. Well, with corrective resistance in EURUSD at 1.4679 this could still be right and I do feel that if we reach there a pullback is likely. The issue with this view is what is occurring in USDCHF which comparatively has already retraced 61.8% of the entire move from 0.9909 to 1.0506. It’s a lot more difficult to fit a suitable bullish scenario here…

It looks like we’ll get a pullback today and where this stalls will hopefully provide us with some more solid clues. I think also we should be looking at USDJPY as this also has potential for a larger decline than I originally thought. If it gets anywhere below 91.10-25 I’ll be concerned and through 90.04-32 will imply a stronger move lower. If this coincides with the Dollar losing out against the Europeans then we can begin to look at a more direct decline…

To cover the JPY crosses, I feel there is risk of weakness today and back to retest Friday’s spike lows. Again, the reaction we get at those levels will determine the outcome here… Note that we’re seeing some pretty deep bearish divergences in EURJPY and AUDJPY while GBPJPY never matched the new highs that the other two managed. This also confuses the overall picture as to what drives the crosses lower if they break those Friday’s lows by any significant amount… Well, first I’ll want to see how today pans out as hopefully it will provide solid input from which we can build a stronger game plan.

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 up reports (+35 pips) and the 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, January 11, 2010

Whether the Dollar is seeing a deeper pullback or the MT reversal has already begun is unclear

Clearly Friday didn’t quite go to plan... The limited gains seen followed by the stronger reversal raises the question whether this is merely a deeper pullback before a move to marginal new highs or whether it is the total reversal occurring sooner than expected.

The picture has a few conflicts. In the larger daily picture EURUSD has moved to just above its minimum retracement at 1.4208 and from that point of view I’d be content to say the correction lower has completed. However, at 1.0506 USDCHF has seen a pretty shallow correction… I can’t entirely rule it out. GBPUSD has corrected enough also at the 1.5832 low… I could also say the same of USDJPY…

The other side of the picture to observe is the depth of the pullback from the Dollar highs. EURUSD has not really retraced as deeply as I would normally expect and here the fuller retracement lies around 1.4679… However, to battle with that, USDCHF has seen more than I would expect…

So the argument is there to support a resumption of Dollar losses into Q2… The Dollar cycle high I had been observing is now around 10 days away. A reversal now would come within normal deviations from the perfect timing but then we do have to keep in mind that a final high could come towards the end of the month and still remain within that deviation.

I do feel we’ll have confirmation possibly by the end of the week. For the moment we’re going to have to be aware of the key levels that would indicate that a break has been seen. I don’t think this is going to be a runaway Dollar decline at this point and see areas that should restrict losses today. The more important information is going to come after the pullback to the decline that started on Friday. If this begins to push more strongly then I’d start looking for a retest of the 1.5143 EURUSD and 0.9909 USDCHF Dollar lows.

Thus, for today I think we should take care not to get carried away too quickly as there is likely to be some better Dollar selling levels. Given the ambiguity at this point it will be vital to confirm the trades with set-ups.

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 up reports (+25 pips) and the 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, January 8, 2010

There should be one last pullback lower in the Dollar before resuming the uptrend

Yesterday developed very close to the sort of expectations I had … on the whole anyway. Dollar-Europe remains in its volatile range trading and did what it oughta… However, in my books that recovery was the penultimate leg in the long sideways consolidation and therefore we should have one final leg lower before the Dollar’s uptrend resumes.

The tricky part of this is organizing the expectations in the three of the Europeans… For EURUSD the issue is whether the pullback will be brief or deep and this may well be true about USDCHF but my feeling is that it will make another minor new low and whip right back up again… As for GBPUSD… well, that’s a bit tougher but one scenario is the moderate pullback higher that would be of sufficient depth to match the expectations of its continental cousins.

I’ll just repeat again … but I still see the Dollar’s cycle high in around 5-10 days now and that should be sufficient to see the kind of targets I have in mind.

Now, what did go wrong yesterday was USDJPY and the JPY crosses… In terms of the bigger picture which I see being a daily pullback the break above 93.33 is disappointing but it still remains within normal retracement ratios. This does look more like reaching 94.54 at least now and that is my next target but I can also see resistance at 95.08 & 95.89… We’ll take it in stages but what I do think is that we need a pullback first so I’m more inclined to a move lower today.

This seems to be reflected in the JPY crosses also. I have to rework targets but the odds now favor the upside.

One final point is USDCAD which bounced nicely from its support and tends to slip into the overall (U.S.) Dollar expectations and a move back to the 1.0576 high.

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 up reports (+35 pips) and the 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, January 7, 2010

It looks like a day or two more range trading against the Europeans…

Well, I can’t say that was a good day yesterday. Well, USDJPY was ok and to an extent GBPUSD but the rest was deflating following the beginning of the week… What is clear though is that the Dollar’s final push higher must wait just a little more and this should take for the rest of today at least and possibly a bit into tomorrow as well.

In many ways I feel more satisfied with this when considering my targets in EURUSD and USDCHF which aren’t that far beyond the Dollar highs seen at the end of last year. It really shouldn’t take too long for that to occur and thus this anticipated extension of the sideways consolidation tends to fit nicely into what is probably around a 6-10 day time frame into what I feel will be a cycle high for the Dollar.

Thus, don’t expect too much movement today… The pair I feel we need to watch more than act on is USDCHF which is mapping out one of those rather nasty consolidation like structures that normally lead to a reversal. Over the past two weeks we have seen marginal lows at 1.0320, 1.0279, 1.0251 and overnight 1.0241… I would expect this sort of thing to continue but I don’t think it’s going to get too much lower now.

USDJPY made a direct recovery and stalled just a few pips above target. I’d like to think that the correction is complete but it looks like developing a flat like correction so we’ll have to still take care.

Meanwhile, while the Dollar is finding it hard developing any direction elsewhere the Aussie is firing on all cylinders and pushing higher. There should be a little more to go today but the 0.9259-80 area looks like holding on this occasion. This could translate into around 85.93 AUDJPY. These still look like giving the best movement today…

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 up reports (+50 pips) and the 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, January 6, 2010

Today will likely test whether the Dollar can resume its uptrend against the Europeans

USDJPY did its job well yesterday and as suggested dragged the crosses down with it. We may have a little more to go but the greater indication I get is that a pullback is now the stronger risk today. At the same time there is early evidence that the Dollar may well have resumed its uptrend against the European currencies.

So what are the risks today? Well, the sticking points are the JPY crosses. They backed off nicely from their recent rally but appear quite close to a pullback higher also. The implication is that the European currencies may remain range bound today… Thus the emphasis today is on attempting to identify the boundaries of what should be the downside limitations of the JPY crosses together with the Europeans.

I should add that I feel the trend is reversing for the JPY crosses – that is that we’re going to see a period of weakness albeit probably in a much larger consolidation. In that case we should always keep in mind that if there is any weak side then it is for the European currencies to weaken against both the Dollar and probably JPY also… Thus the support levels in both groups should be observed closely.

I am getting more bullish for the Dollar against its Canadian counterpart also and overall the underlying implication is a resumption of the Dollar uptrend and today could therefore be seen as an important indicator to see just how strong the Dollar can be and how this final rally over the coming 2 weeks will develop.

Thus I suggest that we should be prepared for a range trading day but open to breaks in the Dollar higher and maybe even the JPY crosses lower…

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 up reports (+0 pips) and the 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, January 5, 2010

Dollar-Yen appears to have topped out… and could drag the crosses down…

I am mostly satisfied with how things progressed yesterday with one major exception in EURJPY. However, what does strike me is the growing risk that USDJPY has met its target, has made a constructive decline and I now fancy this to decline. Furthermore, I tend to think the JPY crosses are approaching some highs also…

On the assumption that we seem to be close to a corrective high in EURUSD, corrective low in USDCHF and possibly AUDUSD looks pretty toppish now the downside risk in the JPY crosses does seem to be supported by the individual currency pairs’ analyses. I’m not convinced this is going to be a sudden and rapid freefall however, so let’s not get too carried away. Picking tops is what I like to achieve but prudence dictates that we do need confirmation from other areas of the wave structure first. However, this is the strongest indication I see.

For a start I am not directly bullish for the Dollar quite yet. I do feel that we shall see EURUSD reach 1.4496 and USDCHF to 1.0233 at least so we can observe the reaction there to confirm my suspicions. Assuming these prove correct then there should be an initial decline. However, referring to my comments from yesterday I do still have an approximate 2 week horizon for the final Dollar high so we need to pace ourselves for this move with a possibility of initial consolidation in the Europeans.

So today I am looking for some initial probing by the Dollar lower against the Europeans and against the Yen too. Following that the Dollar should start recovering and at that point we will have to coordinate the analyses of the JPY crosses versus the Europeans to ensure that they top out at the right levels. Assuming they do we may even see the Europeans lead the way on the first move lower. Following that we’ll have to see how the balance of play develops…

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 up reports (+90 pips) and the 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, January 4, 2010

The underlying Dollar trend remains higher but with short term doubts

As the year of the Tiger approaches I want to wish you a happy, peaceful,
healthy and above all profitable year.


Yesterday I spent a few hours catching up with the cyclic positions, aware that I have been calling for this rally to be a correction only, and for me the dominant indication is that we have around 10-15 trading days of strength left. The next thing to consider is whether the uptrend resumes directly or whether there will be a period of consolidation before the final move to the anticipated corrective highs. In EURUSD and USDCHF I still tend to favor these being around 1.4014 and 1.0667 areas respectively. There are deeper retracements which I can’t totally ignore but at the most we’d then be talking 1.3820 and 1.0825.

For USDJPY we have already reached levels that I have been indicating as a possible high so take care here as I don’t really see too much upside left.

The next part of the jigsaw is establishing just where we are in the bullish structure. This is the tougher element to crack as the decline in liquidity has caused normal extensions to fail. It is quite normal at this time of year as to achieve decent accuracy we require a level of liquidity which means that no one (relatively small) order can have any impact on the market. However, definitely for this week and possibly part of next, liquidity levels will probably remain subdued.

The picture I get overall is that we have completed two out of three intermediate structures in the pullback and thus we are looking at one more which should come in three distinct moves. This is where the potential confusion can lie as between the 2nd and 3rd intermediate structures we could see a high level of volatility still. Given the last intermediate structure would probably last somewhere between 5-10 days it does suggest that there is a little more time to be padded out with a more complicated consolidation.

So as the New Year’s trading begins I would thoroughly recommend holding off from committing to long Dollar positions that are intended take advantage of the expected rally and play more on the short term moves. Support & resistance levels will tend to be approximate due to the lack of liquidity so make sure you use trade set ups to confirm trades.

Today’s free analysis is for EURJPY and can be found on http://www.fx-forecaster.com/DailyForecast.html along with the trade set up reports and the 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