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HARMONIC ELLIOTT WAVE

Sunday, February 28, 2010

There are opposing signals but while Friday’s Dollar lows hold we should see resumption of the uptrend

Friday’s moves in EURUSD and USDCHF were close to perfect and the failure at the 1.3687 high and 1.3694 low respectively certainly look as if they’ve completed the correction from the original 1.3449 low and 1.0897 high. I have to still point out the daily Dollar bearish divergences but frankly, while Friday’s Dollar lows hold (or see only minor follow-through) the Dollar uptrend still seems to be solid.

Thus, we should see a higher Dollar by the end of the day and quite possibly close to the highs seen thus far. I say “possibly” as I note that GBPUSD, while still overall bearish does seem close to an interim low. Therefore, there does seem to be risk that instead of a sharp resumption of the Dollar uptrend, we may see an initially choppy one while GBPUSD extends losses a little further but then sees a pullback. Assuming there is correlation with the other Europeans it could imply this more choppy start of the Dollar rally.

USDJPY had a quieter day than expected, only just managing to push below Thursday’s 88.79 low. This does tend to support the view that we should first see extension to 88.33 but then see a pullback. However, the downtrend remains in place.

If we sum up the implications for a potentially choppy start to the Dollar-Europe rally and the limited losses in USDJPY then the crosses look like remaining a bit erratic themselves… It doesn’t seem to be a day for an aggressive follow-through lower. Here I remain bearish still but this probably requires a day or two to resume – but when it does there does appear to be room for some further strong losses…

AUDUSD seems to have found its retracement target and USDCAD seems to have a more bearish outlook today.

Today’s free analysis is for USDCHF and can be found on http://www.fx-forecaster.com/DailyForecast.html along with Friday’s Trader Package Review & trade Set up report (+235 pips).

Have a profitable week
Ian Copsey

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

We shouldn’t see a repeat of yesterday although USDJPY should see one further low today

The sleeping cow was kicked wide awake yesterday…

First, USDJPY just collapsed. It was always a risk and I feel there is probably more chance today of this following through but only to a marginal new low and running into the weekend and into the early days of next we should see a correction develop. However, further out there is still downside risk.

This should be somewhat reflected in the JPY crosses although I am less in favor of new lows today. Here I feel we have seen enough for now and a correction is due but we’ve just about reached initial resistance as I write and thus we could find this a down-up day for these pairs.

As I wrote yesterday, don’t believe the Dollar will follow-through higher directly and so it came to pass. The next leg is now the issue and if I have any preference I feel we can see the Dollar fall back once again to the corrective lows seen since the peaks. I haven’t changed the underlying bullish view – it’s just a matter of this most likely being a complicated correction, potentially a flat one, or close to flat.

This tends to be supported by GBPUSD which managed one of its “whoops, I just lost 300 points” days. It doesn’t look like the end overall but it should be requiring a pullback before it declines in tandem with EURUSD. When that happens then the JPY crosses can extend their losses too – and these still seem to have some way to go.

AUDUSD – much the same as the Europeans – due a pullback higher but will extend losses next week…

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 (+200 pips).

Have a great weekend
Ian Copsey

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

Thursday, February 25, 2010

The deeper correction looks less likely but direct Dollar gains are not yet a foregone conclusion

Yesterday demonstrated that we need to invent a coin with three sides… One side needs a bull mark, one needs a bear mark and the third needs a sleeping cow…

I had expected to end up Dollar bullish today. If we had just a two-sided coin that would be where I’d place a bet but there are just a few indications that suggest that things still aren’t that simple. However what must be remembered is that the underlying picture is Dollar bullish so be ready to jump a ride if this is confirmed.

What I am slightly concerned about is the daily Dollar bearish divergences still and there is the odd chance that we could see an extended flat correction. Therefore, until the Dollar highs are broken (and allow for a few pips overshoot) there is the contrarian view that could generate a pullback right back to the Dollar lows seen this week…

Where there is a great risk is in USDJPY and its crosses. Be aware that any loss of yesterday’s 89.76 low would open up a big hole and there isn’t a great deal of support until it hits the 88.33-76 area. Even then it should only be for a correction.

The implication for the crosses is evident and if the Dollar does break up against the Europeans then we could see some fireworks on the crosses.

All in all, what it does mean is that until there are stronger indications we are going to have to curb any immediate Dollar bullish views until the Dollar highs are firmly taken out. I may be completely wrong but then we’ll get breach of those highs and it’ll be obvious. Until then, I feel that rather than observing the highlighted support & resistance it would be better to consider each level independently and look for trades on patterns around them.

If a move doesn’t look like it’s going to work out… watch out for the sleeping cow…

Today’s free analysis is for AUDJPY 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

Wednesday, February 24, 2010

The market needs a new scriptwriter…

If there is a scriptwriter for this market then I think he’s using a language which I can’t understand… Yesterday’s moves completely surprised me and really make the next forecast many times more difficult. With the primary Dollar trend being higher the sensible thing would be just to sit on the back of the trend and call it higher.

Maybe it will, but the sort of targets being implied by a direct resumption of the uptrend just don’t seem to be supported by what we saw yesterday. Then what’s the alternative? I am rather loathe to suggest it as I really haven’t caught recent moves at all well… but the other argument would suggest a flip back lower again to the sort of targets I have been indicating…

That’s just about as difficult as flipping a coin. However, I do see some support for this particularly in GBPUSD and AUDUSD.

Let’s look elsewhere. I was just as annoyed with USDJPY which slipped quickly below all my supports and flips me back to the larger scenario looking for a larger daily range trading scenario. This does look like it has further to go now with momentum hitting lows so it would seem likely that we’ll see the JPY crosses following behind. However the JPY crosses, while I still expect some minor extension lower today, don’t look as if they’ll significantly breach their old lows directly and more likely force a pullback higher.

Now this also supports the argument for the Dollar to whip back against the Europeans…

Therefore I feel the JPY crosses along with USDJPY are going to lead us to the more appropriate path. Whether I’m right or wrong about this whole scenario I do feel that what happens in the JPY crosses should provide us with the clues we need…

Another day to take care…

Today’s free analysis is for EURJPY and can be found on http://www.fx-forecaster.com/DailyForecast.html along with yesterday’s Trader Package Review & trade Set up report (+250 pips).

Good luck
Ian Copsey

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

Tuesday, February 23, 2010

Market balanced with conflicting signals

There appear to be a lot of “sub plots” in the Dollar story so far, mainly caused by USDJPY and the JPY crosses, but then complicated by AUDUSD…

Let’s start with USDJPY that has been displaying a distinct threat to actually rally and quite strongly. Yesterday’s pullback was pretty much on the dot. There is still chance of seeing 90.90 but I can’t help feeling the next move will be higher towards the 92.41-76 area.

The JPY crosses also still look supported but I don’t think these will get too far higher and the larger risk does still seem lower. However, I suspect that AUDJPY may have finally found its high. That doesn’t rule out a retest of the highs so perhaps this could still fit in with a general bullish outlook today for the crosses. However, when they do find that peak the downside is expected to be robust.

Now, the question then remains whether USDJPY will drive this or the Europeans… Well, after USDJPY reaches the 92.41-76 area I will be expecting a pullback so it could contribute.

If it’s the Europeans we are left with the battle between whether we get one more move lower in the Dollar here or whether the Dollar will resume its uptrend directly. Due to the daily & 8-hour Dollar bearish divergences I opted yesterday for a deeper pullback. I can still see this as a strong possibility. However, GBPUSD doesn’t seem to have much room for much strength and while this could merely be a factor of the GBP-European crosses, it does raise the “caution” flag.

There is no doubt that in the larger scheme of things the pullback lower in EURUSD and USDCHF so far has been limited so we cannot forget to watch our backs. This is where I see the complexity of the situation with the crosses having a potential impact and I feel that keeping an eye on the upside limits for the JPY crosses and the timing of when USDJPY reaches 92.41-76 will be crucial in understanding when the underlying Dollar rally will resume.

I feel it could well become a tight call between the Dollar bullish/bearish scenarios…

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 (+120 pips).

Good luck
Ian Copsey

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

Sunday, February 21, 2010

Momentum conditions do not favor Dollar gains…

All looked well for the Dollar uptrend on the face of things during the first half of Friday but the strong pullback seen by the end of the day does raise a lot of questions over its ability to force itself back to the morning’s highs. The immediate uptrend has no entirely been broken but it won’t take too much more to confirm a deeper correction lower.

Right now in EURUSD and USDCHF there are quite firm Dollar bearish divergences not only in the daily charts but also the 4-hour and hourly… The key to confirm these divergences will be breach of Thursday’s corrective lows. I do feel that this decision will likely be put off until later in the day and Asia will tend to hold off from making that decision, possibly Europe too, but unless there is a significant recovery the weight of argument does seem to now be on the Dollar’s downside.

I do not think this is the end of the major uptrend but merely another correction within the entire picture. In fact, assuming that the 1.3838 EURUSD high and 1.0608 USDCHF low remain intact it does seem to imply a much more bullish target than I have been looking for – towards 1.2960 EURUSD and 1.1190 USDCHF.

USDJPY almost made it to my 92.25 target but stalled a bit short. I’m finding it hard to fit that into the structure I was considering but the interesting conclusion I feel is more likely is that while a pullback lower is probable the outcome may well be a move to higher that 92.25, potentially to 92.64-94 over the course of this week.

This could keep the movement in the JPY crosses restricted, possibly a little higher first but then pullback into ranges. I wouldn’t be too surprised to see some of their characteristic erratic consolidation tendencies arise again. The one I have more doubt about is GBPJPY as I’m not quite so sure that GBPUSD quite correlates with EURUSD and here I see potential for another new low before it can recover – thus this needs more care.

Thus, overall for the day I suggest observing the initial trading and looking for breaks…

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 (+70 pips).

Have a profitable week
Ian Copsey

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

Friday, February 19, 2010

The Dollar upside beckons…

Price developed pretty close to expectations yesterday, failing to follow-through on the first test but this morning has pushed to new highs once again and it seems very likely we’ll see more as the day goes by. Overall I see this moving to 1.3222 EURUSD and 1.1017 USDCHF and thus the emphasis should be buying any pullback.

Equally USDJPY has pushed higher and above the 91.75 target. However, it should be very close to an intermediate high and I really can’t see much progress from here over the day. More, with the JPY crosses looking ragged, I feel the greater pips value is going to come here with USDJPY most probably going to be negatively correlated to the Europeans. I would not be too surprised to see a push closer to the lows from two weeks ago.

I am a little mixed on AUDUSD but I am beginning to feel that AUDJPY will be seeing a correction only and while it should be soft today and possibly even Monday there appears to be a stronger risk of a push to new highs here.

This shouldn’t be too much of a surprise as USDJPY should be undergoing a correction only over today and possibly Monday but a retest of the 93.75 high does seem probable now. This does fit in with the surprise larger bullish structure… In addition to that, once the Europeans reach their targets they should also begin a more sustainable correction higher. Already the daily charts in EURUSD and USDCHF are showing Dollar bearish divergences and I suspect this rally now will probably only deepen these.

Good luck.

Today’s free analysis is for GBPJPY 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).

Have a great weekend
Ian Copsey

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

Thursday, February 18, 2010

The Dollar upside beckons but I doubt this will develop directly

The valiant attempt to move back to the 1.3838 high was all a bit too much for the Dollar, failing at earlier hurdles and provoking a sharp reversal. Clearly the immediate reaction is to call the Dollar higher. However, while this should be the case I’m not convinced this will be direct. I’m a bit wary as I can see one of two alternatives but the difference between them will be the depth of the pullback. If I can sum it up as simply as possible then the alternatives are a deep pullback within a larger consolidation that started from 1.3585 or a slightly less deep one possibly within a large declining wedge.

One of the reasons I can’t see direct losses is also the potential for the JPY crosses to still forge a new corrective high. Obviously we have seen USDJPY break higher but it is close to resistance right now and seems more likely to begin a correction before long. Thus, if I’m right on the crosses then it has to be the European currencies that begin to strengthen against the Dollar.

Now, I should cover this rally in USDJPY. It has taken me slightly by surprise and I’m quite aware of the monthly momentum situation. I find it hard due to what I perceive as downward cyclic pressure to begin to get particularly bullish. However, if I throw the cycles away the structure does have a semblance of bullishness and dare I say this could imply a retest of the 101.43 high…

Before I get too carried away I’d like to see how this develops. To begin to put more weight on this we’ll need a break towards the 93.75 high. It shouldn’t break on first test (or not by much) and then we’ll have to watch the correction and how deep this will be. For now however, there does seem to be a growing risk of strength.

AUDUSD and AUDJPY roughly met their targets but I can’t see any strong reversal indication from momentum. However, the pullback in AUDUSD this morning looks just a bit deep and does tend to point to the downside…

Overall I think some care is required today but concentrate on buying into Dollar pullbacks…

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 (+195 pips).

Good luck
Ian Copsey

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

Wednesday, February 17, 2010

We should see the Dollar extend the pullback a little further before the uptrend resumes

At last a Dollar bearish view played through… Apart from the fact I much prefer getting things right I am rather more optimistic now of the entire wave structure in EURUSD at least and this does seem to slot in with the other Europeans. This scenario should see the Dollar go through a correction to yesterday’s losses during Asian and early European trading followed by follow through to new lows and it’s this decline where I feel we should be watching for Dollar buying opportunities so watch for trade set ups from there…

From these Dollar lows I feel that we should next be looking for extension to the 1.3230 EURUSD and 1.1017 USDCHF areas.

However, do keep in mind that the daily charts are displaying Dollar bearish divergences still. If something happens to cause the market to take fright then the Dollar supports we have reached so far are still close to valid daily retracements… It’s a slim chance but should not be totally ignored.

Now, USDJPY provided us with an additional leg higher yesterday to 90.51. It’s still below the 90.60 break level I have been conveying as being the break point for the upside, but momentum conditions seem to still be modestly bullish. Key support here is at 89.52… breach will slam the door shut on any stronger upside potential…

We have to still keep our eyes on the JPY crosses also. Strong gains seen there as well but within the limits of a correction so far and that’s the way I’d prefer this to develop – as a correction only. There are still some gains to be made on the crosses but not by too much before they approach key resistance. Of course, given my Dollar bearish view this could be decided by the European currencies so it does leave a big question mark over the straight USDJPY rate. This will still require some care. Watch for the key resistance levels in the crosses and straight currency pairs and observe the reaction from there which should highlight where USDJPY will go…

AUDUSD still in a buoyant mood… However, there may be a limited upside left now… 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 (+95 pips).

Good luck
Ian Copsey

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

Tuesday, February 16, 2010

The weight of argument remains with a strong Dollar – the uncertainty is timing

Friday’s Dollar gains are pushing me much, much closer to the Dollar bullish camp. When I saw the move on Friday I thought I’d be strongly bullish and to be honest the bearish scenario is getting so tenuous I really don’t want to make this a prime view but just acknowledge that there is an alternative argument – more based on factors away from the main European currencies and also possibly even gold – that just keep the nagging doubts in my mind. For now they’ll be dismissed to the background.

Now, while Friday’s gains have deepened the bullish argument I still feel there is some short term uncertainty about whether it can follow-through directly. I tend to feel not… This would tend to suggest a move back towards the 1.3838 EURUSD high and down to the 1.0608 USDCHF low. This appears to be backed by what I feel should be a deeper pullback in GBPUSD and also an extension of the gains in AUDUSD. Once seen the Dollar can extend its gains further.

USDJPY has reached the 90.37 target plus 4 pips. However, I’m rather disconcerted with the lack of reversal lower and therefore I feel just a little care should be taken. I find the alternative structure that would suggest that the 88.57 low was the end of the pullback just a bit difficult to swallow. The implication would appear quite bullish. Actually, that’s an understatement – if what I’m looking at is right then a direct rally would look very bullish and target over 100 over the coming months…

It’s still not my favored view but it is an alternative to be considered. I’d still prefer this to decline – and I’m more bearish for the JPY crosses also and this does tend to slip hand in glove with each other. Certainly we’ll need a break below the 89.62 area to maintain the bearish side…

The JPY crosses are pretty mixed and the structure pretty messy. They do have a strong tendency to consolidate in very awkward patterns and until there is any stronger indication we should probably take a step back from these and wait until there is a stronger break.

Today’s free analysis is for GBPUSD and can be found on http://www.fx-forecaster.com/DailyForecast.html along with Friday’s Trader Package Review & trade Set up report (+170 pips).

Have a profitable week
Ian Copsey

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

Friday, February 12, 2010

The strong Dollar gains certainly look like the bull trend has resumed… but I’m not convinced yet…

With Monday being President’s Day holiday in the States the next report will be on Tuesday


Whew… it’s been a difficult week. Once again the preferred Dollar bearish stance failed completely as a strong rally hauled it back up to the year’s highs. First thing in the morning I looked at this and thought this would mean follow-through as described yesterday in the alternate scenarios. It did hold those resistance levels quite well.

Then I had a closer study and I’m really not that sure that we will see those gains follow-through. It really is touch and go and the retracements from yesterday’s highs have already reached their maximum limit if the uptrend is to resume. What I can say is that it will be those retracements that make or break the move higher…

If I have any preference I, perhaps perversely – prefer a total reversal and a move to new corrective lows and probably closer to the last major swing lows at 1.0497 USDCHF and 1.4025 EURUSD… However, just to make sure that I’m not being sucked into a contrarian’s view let’s wait for breaks of the retracements…

If I am right then it’s going to raise the odds that we may have just seen a major Dollar high. I have to say though, even then I think we’re going to have to wait for a while yet for this to be confirmed as any test of the 1.0497 and 1.4025 trend breaks aren’t going to happen directly and we’re more likely to settle back into a trading range…

On the other hand… if I am being contrarian for no reason then we’ll see the Dollar break higher today and the 1.3585 EURUSD and 1.0793 USDCHF Dollar highs will (very obviously) the trigger.

However, note that USDCAD has broken down and AUDUSD and AUDJPY have made some solid gains from their lows. I find this quite encouraging though there are some barriers today that need to be overcome to sustain this move. If they occur I’ll be a little less cautiously banging the Dollar bearish drum again…

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 (+245 pips).

Have a great long weekend
Ian Copsey

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

Thursday, February 11, 2010

Steady as it goes… there are still conflicting indications…

Well, the follow-through lower for the Dollar didn’t happen… Does that mean that it’s still in an uptrend? Technically yes it is and until we see breaks of the most recent Dollar swing lows that’s the way to view it. Could it still dip a little further and still rally? Yes it could. However, even this raises some question marks as to fit this into a Dollar uptrend it would mean that a new high not too far above the highs so far would probably force a pullback at the very least.

I will admit that I find it hard to generate a valid Dollar bearish structure at this point in time in the Europeans. The only indications were the proximity to key Dollar retracement levels that would fit into a multi-year bearish cycle. However, that’s about it and therefore it’s probably wiser to continue with the uptrend until some event causes a reversal.

Having said that I do feel that the pullback lower can extend a little bit further today and then we’ll have to watch for key support levels to hold. It could therefore be a day much like yesterday.

However, the rally in AUD and AUDJPY which has resumed more aggressively this morning is more encouraging. In reality it is still early days but the lows from where these bounced are definitely ones that would fit into a much larger bullish structure… Already the moves seen this morning could generate quite a solid follow-through.

The only thing to drag back AUDJPY is USDJPY which has continued its struggle higher. I do feel though that momentum conditions are slowing (not that it was particularly robust…) and we should see a high later today that should cap for a reversal lower. Watch the 90.37 area for this.

Finally, it does appear that USDCAD has laid down and died again… watch this carefully…

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 (+225 pips).

Good luck
Ian Copsey

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

Wednesday, February 10, 2010

Dollar supports break and causes some turmoil…

The Dollar supports that held on Monday seemed perfect for the near term follow-through higher. When these same supports broke yesterday I have to admit it has caused some doubts in my mind. First and foremost, the Dollar highs we saw in EURUSD and USDCHF were very, very close to adjusted retracements within what would be a still very bearish multi-year Dollar downtrend.

What’s more, the tentative calls for AUDUSD and AUDJPY to have found their lows proved right – at least over yesterday – but it tends to double up the overall doubts. The refusal of USDCAD to rally to what I had been considering as a final target has tripled the doubts. What I do find tough to fit into all this is GBPUSD – having broken below 1.5706 it began to look quite bearish. This dip may still be part of a complex correction that would limit any gains to around 1.6900 if all this turns itself around.

But then I can’t say there were particularly strong reversal signals from the Dollar highs though there are minor Dollar bearish divergences in the daily charts…

Let’s just say that this scenario is back in my mind but it is really much to early to feel confident about it. That being said the bearish structure has become pretty complicated too. Therefore I feel that maybe some short term caution is warranted.

USDJPY has begun the push higher as suggested was the risk yesterday and I expect this to extend a little further. Overall there does seem to be need for one more push lower before this can reverse higher. The JPY crosses should benefit from this again but I don’t think a peak is too far away now with reversal patterns at the lows not too far from achieving their targets.

Overall today I feel there is still room for some additional Dollar losses against the Europeans but with the prospect of a correction setting in over the day. Also higher USDJPY and JPY crosses but similarly with the upside limited.

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 (+150 pips).

Good luck
Ian Copsey

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

Tuesday, February 9, 2010

Key Dollar supports held and this should follow-through to new highs today

It was a pretty dull day yesterday and in some ways I’m not totally surprised. I had though the correction would have ended a little earlier but the key Dollar supports held in EURUSD and USDCHF which bring more confidence in the view that we have another leg higher to go. However, what has also occurred is a pullback in momentum that has potential to limit the gains and force a second and larger correction.

This is pretty much in line with the wave count I settled on yesterday and I feel therefore limits the larger Dollar rally to probably lower than the frenetic market seems to have in its sights. Just 3-4 months ago the market was screaming for 1.57 and 1.60 EURUSD and now the excitement is for a retest of the 1.2328 low. It does seem a bit too much in such a short space of time and to me begs a checking of emotions and to consider a scenario suggesting continued sideways range trading albeit on a large scale…

If USDJPY’s negative correlation to the moves in Dollar-Europe continue then my call for one further low here before a reversal higher – also in a sideways consolidation – may prove to be correct. I don’t see any change to the USDJPY view and that may hold implications for Dollar-Europe too.

Two other pairs I am looking at with some doubts and a burrowed frown are AUDUSD and AUDJPY. There are pros and cons to this situation but ideally I’d like these to have found their respective lows or perhaps have one minor new low to come. In terms of any correlation to the general Dollar movement and the anticipation that we’ll get a reaction from minor new highs, then there is an argument to be noted. It’s still early days and could swing either way. I can’t say momentum is quite on my side, but there is a nagging doubt in my mind… Watch those two therefore.

I even see a top in USDCAD coming as well. While the market concentrates on EURUSD, at the moment I can’t quite get the same feeling of excessive Dollar gains… but let’s see if my scenario proves itself first…

Today’s free analysis is for AUDJPY and can be found on
http://www.fx-forecaster.com/DailyForecast.html along with yesterday’s Trader Package Review & trade Set up report (+120 pips).

Good luck
Ian Copsey

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

Monday, February 8, 2010

The pullback lower in the Dollar should be limited and risk is for losses to develop later

Friday didn’t produce anywhere near a deep enough correction lower to even vaguely support the potential for a larger reversal. As a consequence I have been scouring the wave structures to get a better understanding of just how far the Dollar can rally. Overall, I’d say towards 1.2950 at least and some risk of 1.27-1.28 EURUSD.

Having said that, while there does appear to be room for near term losses this week I feel the downside risk is limited this week. We do seem to be approaching some areas that stand a chance of providing a correction – maybe lasting 3-5 days – before the next leg higher (for the Dollar) and thus towards the targets mentioned above probably before the end of this month.

Thus, this week looks like a bit more of a stop-start-stop type week and therefore it’s going to be better to take profit and re-establish positions on the rebounds.

USDJPY has held key resistances so far. It’s still a little early but I feel we’ll see a mostly range trading day today. However, once this has completed there is still risk for another leg lower. However, the next leg lower should be the last for a while. I’m still focusing on a basic sideways consolidation.

This should convert into some choppy trading overall for the JPY crosses. Momentum does still look overall bearish but I feel we should start seeing these begin to see some rather erratic trading again. In some ways I’d like to see them bounce on a daily basis but it’s a risky call as momentum is not that great. It also seems likely that we’ll see the next leg of losses in EURUSD at the same time as those in USDJPY so I can’t rule out some solid losses again.

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 (+468 pips).

Have a profitable week
Ian Copsey

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

Friday, February 5, 2010

While I see further Dollar gains I think they’re limited now…

Oh.

Well, yesterday’s moves were obviously not in the forefront of my mind yesterday. The Dollar downtrend was definitely the underlying risk but the combo-action of both EURUSD declining simultaneously with USDJPY was just spectacular. I had written in the weekly review last weekend that I thought we’d see losses and highlighted the 139.30 area in GBPJPY but I had begun to think it was going to take on a few more twists and turns before reaching this target.

However, now that it has along with AUDJPY finding a low close to its old lows and EURJPY that appears to have ended a move lower also the implication is for a sizeable recovery. I can’t say there are many signals to suggest this but spike bottoms tend to occur without these.

Consequently this has interesting implications for USDJPY and EURUSD… Frankly I think we’re getting to a significant low in EURUSD. I am even considering suggesting it could be a very, very significant low. However, just for now I’ll just concentrate on some levels not too far below yesterday’s lows where I think we could see a reversal.

Now, with the fact that I still see USDJPY lower – down to 86.90-00 approx – this does suggest quite a solid reversal for EURUSD. Indeed, looking at the daily charts the Dollar’s decline has begun to show signs of slowing with mild Dollar bullish divergences in the daily charts. In addition, around the 1.3652 and 1.3576-92 areas we are facing some major projection targets. In USDCHF these are at 1.0727-61 and maximum 1.0820.

It’s Non Farm Payrolls tonight so the potential is there. While it would be very risky anticipating this eventuality it will be useful to have this in your minds…

Today’s free analysis is for GBPJPY and can be found on
http://www.fx-forecaster.com/DailyForecast.html along with yesterday’s Trader Package Review & trade Set up report (+320 pips).

Have a great weekend
Ian Copsey

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

Thursday, February 4, 2010

It looks like this Dollar correction is going to last longer…

Those Dollar supports… well, they didn’t last long… In some ways I am more comfortable with the developments as they tend to fit in better with some wave ratios and while the Dollar high has not yet been totally defined there is still room for another round of losses. From the start of trading this morning I feel the correction from yesterday’s push lower are complete (or very, very close to completion) and thus the coming day and into tomorrow should see some further corrective losses.

And while GBPUSD also looks pretty bearish right now I feel there is a strong chance of a reversal back higher to those resistance levels seen yesterday. By next week we should be back in Dollar bullish mode.

However, it seems as if USDJPY has surprised and is already in bullish mode and I feel that early trading could well see follow-through. I suspect it will not be sustainable today but the outlook could well get stronger either tomorrow or into next week. The only caveat I’ll put on that is that any drop below 90.70 would see a recycling of the correction back to 90.87-98…

That in itself has implications for the JPY crosses but looking at these independently there does seem some risk of sideways consolidation. These will take some managing and probably better left untouched until a stronger signal is generated.

Equally, while I have been bullish on USDCAD and it bounced almost perfectly from support yesterday, we do need a rapid follow-through higher or it will end in tears on a break below yesterday’s lows…

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 (+100 pips).

Good luck
Ian Copsey

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

Wednesday, February 3, 2010

We are approaching what I feel may be important Dollar supports…

Well, yesterday was not a day to write home about… or maybe time to write home as there was little going on in the market with tight & messy range trading failing to generate many opportunities. If I get any fairly constant message it is that we’re close to key Dollar support levels. I feel they’ll hold and we’ll see a frustrated market get tired of waiting and reunite themselves with the Dollar bullish view.

So take note of the Dollar support levels I shall highlight in the report today. Even if I’m wrong in looking for Dollar to resume its rally I feel these levels are a key pivotal area and if they break then we should see a modestly strong follow-through. Either way there are pips to be made around these levels I feel…

USDJPY has failed to lie down and die. The pattern that seems to be developing could well be an ascending triangle that will keep it within yesterday’s range, a cap expected once again at 90.90-95. However, once it reached there and pulls back this should be the final dip so be prepared to buy the subsequent break higher… If it fails and moves below yesterday’s low then expect follow-through lower.

The strength here, as well as the strength in EURUSD, has dragged the JPY crosses higher. The entire structure at these lower levels has become a bit messy. Certainly, if they manage to take out some highs they could get stronger still. However, I do also see risk of another dip lower. What we shall need to look for here is the reaction in EURUSD and AUDUSD in particular. I am more conservative about GBPUSD and thus the cross could behave differently.

We’re also back close to the critical 1.0548-56 support in USDCAD and this too appears to be a critical pivotal area. While it holds we can still visit 1.0784… If it fails then it’s doomed to losses back to 1.0205-23…

Take care today and make sure that moves between the straight Dollar-Currency pairs are aligned with those of the JPY crosses…

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 (+110 pips).

Good luck
Ian Copsey

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

Tuesday, February 2, 2010

For now I feel the Dollar pullback lower can continue but take care…

I closed yesterday’s outlook by suggesting: “Thus, I feel the day could have potential for some early whips, maybe even some minor new Dollar highs, but then settle back into a trading range…” This proved more immediately correct that I had considered. However, we do therefore appear to be in a correction back lower but I’ll take my cue from USDCHF this time which remains with support in the 1.0526-53 area. Ideally this should remain supportive and trigger further Dollar gains.

This should equate to resistance around the 1.3950-81 area EURUSD. I’ll add that there appears to be a trend resistance around current levels in EURUSD but I’m rather wary of this since it doesn’t seem to adhere to the correct requirements to be a valid trend line. Therefore, take care with what you read elsewhere.

I’ll also add at this point that there are some rather loose wave relationships around and this is causing some doubts of exactly what is happening. Therefore it may well be beneficial to look at the JPY crosses. These appear to have found an intermediate low and have some fairly deep corrective targets. This may also imply USDJPY could rally as it failed once again on the downside yesterday and this has upset my basic bearish stance. However, it does seem to have potential to drag the crosses higher if it breaks above the 90.94-98 area. Until then the first move for the crosses appears to be lower.

The underlying message today is that we appear to be in a corrective section of the wave structure and this has the potential added complication of choppy price action. However, this should mean that we’re going to have to try and coordinate the moves in the JPY crosses with the straight Dollar-currency pairs.

I’d even add (and I don’t think I see this happening) that considering EURUSD has not broken below the deepest retracement at 1.3820, USDCHF has not broken above 1.0667 and GBPUSD below 1.5832 that this still does not confirm Dollar gains and leaves a small window of opportunity for a shock reversal lower. It doesn’t look likely but as a caveat it is worth noting…

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 (+280 pips).

Good luck
Ian Copsey

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

Monday, February 1, 2010

I stick now with the underlying Dollar bullish view but the day’s outlook is unclear…

Friday was a mixed bag, a bullish day for the Dollar overall as expected and hit targets in EURUSD (just below to 1.3857 this morning) and to 2 pips below the 1.0641 resistance in USDCHF. In the process it has pushed momentum to extremes and this suggests there should be further gains to come…

That’s just about as precise as I can get at this point… The problem I had this morning was finding a structure where the wave relationships worked – and across the entire decline from 1.4578 EURUSD… If there is any common ground then it may well be for a mildly deeper pullback although I can see conflicts even with this. Therefore I think it’s going to have to be a day when we watch for breaks levels again… as frustrating as that may be…

However, the clear picture is that the Dollar remains with a more bullish sentiment and this should be kept in mind. Fighting recent gains has not borne much fruit and there doesn’t appear to be any obvious reversal signals…

Two currencies that push me more to a Dollar pullback are GBPUSD and AUDUSD, both of which opened with a rush lower this morning but which both seemed to find support areas that suggest a correction higher should be due soon. The immediate uncertainty is whether there will be one more dip before the recovery becomes stronger.

Also, note the JPY crosses that appear to have developed some short term risk of a pullback higher which tends to slot in with a Dollar correction lower also.

Thus, I feel the day could have potential for some early whips, maybe even some minor new Dollar highs, but then settle back into a trading range…

Today’s free analysis is for GBUSD and can be found on
http://www.fx-forecaster.com/DailyForecast.html along with yesterday’s trade set up reports (+95 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