Thursday, April 1, 2010

Dollar weakness seen but I don’t see this reaching too much further now

Please note that the next report will be for trading on Thursday 8th April

The bounce in EURUSD from 1.3384 had me thinking the larger consolidation would be correct… Clearly the market had other ideas. The drop in USDCHF actually provides a strong clue as the target for the downward correction is at 1.0423-48 and that looks to be on target. Thus, having to once again re-arrange myself for the rally in EURUSD it should see a little higher today but that should also soon find it’s high.

Now, the 1.0423-48 USDCHF target will imply that we should again see Dollar strength and equally this will apply to EURUSD. However, I’m not totally sure that this will be a direct resumption of the Dollar uptrend but a rather shaky one at first. Given the different places in wave structure between the two I am more in favor of a rather long lasting consolidation but clearly from today with a Dollar bullish bias. Certainly, when I return to my desk next week I am expecting to see the Dollar higher but not to have broken 1.0750 USDCHF or 1.3267 EURUSD…

USDJPY… basically moved in line with expectations but the intermediate high overshot by 10 pips and the pullback from there just below the 92.95-83.05 area. It appears to have been a deep final pullback before the final leg higher which retains the same target.

Clearly, the combination of both EURUSD and USDJPY making highs (and GBPUSD can be included) has a greater impact on the JPY crosses. Therefore the bigger bang for a position should come from the crosses. However, the problem will be identifying the stalling levels as the structure in these is horrendously complicated right now. If the market is nice to us perhaps the respective highs occur at the same time …

Therefore, over the next few days, while tomorrow and Monday being fairly widespread holidays the movement may be more limited, by Tuesday and Wednesday there seems to be risk of a resumption in Dollar gains but expect life to be a bit choppy…

Today’s free analysis is for AUDUSD and can be found on along with yesterday’s Trader Package Review & Trade Set up report (+90 pips).

Have a great Easter break
Ian Copsey

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

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