I get the impression that we’re going to see some messy range trading

Yesterday saw many of the directional calls being correct but what surprised in some cases was the extent of the moves without too much of a correction. That may seem quite positive but I didn’t quite find it so. In the context of the larger picture, for the moves I had anticipated yesterday to develop in support of the entire picture required some deeper corrections. In many cases I was seeing mostly what appear to be corrective structures which do not necessarily require deeper retracements.

It has swung me back to a more cautious approach and this does appear to be more of a trading range approach. The most difficult thing about this type of structure is the relative erratic and uncertain nature of the internal structures. Therefore, if we begin to see a deeper pullback to yesterday’s moves I’d recommend taking a lot of care and to take profits timely.

If I have any broad brush stroke observations then I do still see the additional follow-through in EURUSD and USDCHF which I had anticipated yesterday. While the slightly deeper pullbacks in these two pairs was a bit frustrating it does tend to lend to the idea that we’re going to see this type of trading continue.

While GBPUSD and USDJPY also rallied well I am reluctant to get too overly bullish at this stage. Certainly GBPUSD requires a correction and this could still retain a bullish structure. However, the JPY crosses seem correlated from the point of view these too appear to require a reversal lower within the larger range. AUDUSD is the same.

If there is any currency pair I feel could provoke new extremes it is USDCAD. My very bullish view was swept away with that drop and while today should see a pullback this does seem destined for the original targets I had been suggesting 7-10 days ago… probably around 0.9830-65… However, wait for the pullback higher first…

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 (+0 pips).

Good luck
Ian Copsey

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