Monday, April 19, 2010

There still seems room for extensions of all Friday’s moves

There were a few warning on Friday about recycling of corrections. Not only has this been for the closer retracements lows but a much larger recycling especially in the JPY crosses with USDJPY breaking below 92.56… What next? Well, a bit more of the same I think though today should first see corrections in most currency pairs.

Starting with USDJPY … The loss of 92.56 forces me to look at a different structure in the rally from 88.13. The big problem all the time here has been the sharp moves early on in the rally. I see weaknesses in both bullish & bearish structures but at the moment the ball is still in the bullish court and I’ll cautiously remain with that until proven otherwise. However, this does still have a little further to go – probably just below 91.00 before any recovery can be made.

The Europeans… in EURUSD and USDCHF I have had to consider a correlated approach and this tends to argue for a deeper correction higher in the Dollar for now. I feel that perhaps we’re seeing a larger sideways consolidation, probably in a triangle and therefore expect the extensions in these two pairs to be more aggressive than that in GBPUSD. The Pound has a more bullish overall feel I think and while there are still new corrective lows to come I feel these will be limited compared to the other two…

This impacts on EURJPY more – I was rather surprised but this seems to suggest a retest of the 119.64-77 area again… That seems a bit aggressive so take care. However, in GBPJPY this may translate into losses down to around 139.60-80… Even AUDJPY looks like it has a little more to go but probably not much below 84.00…

While AUDUSD has reached the target I set at 0.9204 it doesn’t yet look complete so expect the 0.9235-60 area to cap. Even USDCAD was outstanding in its rally – much stronger than I had anticipated and should therefore extend back close to the 1.0301 high after finishing a small correction lower…

So overall, for today I feel we look to sell into corrections all round but in the extensions there should be opportunities to enter for the resumption of trends – except perhaps for EURUSD & USDCHF which may well remain within the larger range for a few more days.

Today’s free analysis is for AUDJPY and can be found on along with Friday’s Trader Package Review & Trade Set up report (+185 pips).

Have a profitable week
Ian Copsey

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

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