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HARMONIC ELLIOTT WAVE

Wednesday, June 30, 2010

There’s still one more leg lower left for EURUSD…

The losses in EURUSD actually developed a little faster than I had anticipated but at least it’s in the right direction even if USDCHF also decided to edge lower a bit also... Commenting on EURUSD only the decline has been close to expectations, yesterday’s low just 20 pips below my favored target but still at valid projections. This should cause a correction which should be modestly deep and probably take at least half of today and if it gets more complicated – which is a distinct possibility – then perhaps it can last through to early tomorrow. Once this correction is complete then we can anticipate the final leg lower before a larger reversal.

Just stepping back this correction from 1.2466 has developed in a manner that could generate a sideways consolidation that could then extend the correction for some while longer. However, this will also probably mean that we need USDCHF to be in a position to do the same. The issue here is that USDCHF hasn’t reached its target as far as I can see. Normally in trending moves one of the major corrections is deep – and that wasn’t the first so it implies that the next low should provide that longer correction. This should imply that USDCHF should be taking advantage of the current bullish correction in EURUSD to extend losses again today…

I feel too that GBPUSD is close to a high that should cause a longer correction also and therefore it will be useful to keep this possible long correction in mind.

USDJPY… bearish. The more this develops and the way the structural development has progressed is beginning to make me feel like we shall eventually retest the 84.82 low… It’s a bit earlier than I had wanted but does fit into the larger weekly picture. It’s not going to happen this week… I think… but will probably occur while the Europeans are consolidating. Thus bear in mind the apparent bearish implications as we move forward.

In the monthly structure this all tends to correlate as after the current correction higher in EURUSD & GBPUSD (probably) I will be looking for new lows (while USDCHF should just register a deep correction) and I suspect that USDJPY will finish its weekly consolidation at the same time. This should be followed by the bearish monthly cycles in the Dollar kicking in and surprising us all with a steady decline…

Overall EURJPY is bearish but I’m not convinced it will drop much below 106.33-50 at this time. That’s a bit touch-and-go as overall there is still downward pressure to around 100 so it’s a matter of whether this decline is part of this final wave or we’re seeing a complicated correction…

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. (+35 pips)

Good luck
Ian Copsey

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

Tuesday, June 29, 2010

The Dollar has begun to develop schizophrenia…

It was actually difficult to provide a generic subject line today as the Dollar appears to have developed multiple personalities… It ended the day higher against the Euro, lower against the British Pound and Swiss Franc while sleeping against the Japanese Yen and Aussie Dollar…

It actually begs some questions on the next move. In general I like to analyze currency pairs individually but draw correlations between linked pairs, particularly the Europeans. Such diverse movements do occasionally develop but normally, without significant catalysts, tend to correct themselves quickly. This has been a fairly repetitive pattern in the Dollar’s decline from its highs, mostly between EUR & CHF.

Using EURUSD as the core analysis I feel there could be a minor new low followed by a correction higher and by late in the day of tomorrow further losses. Overall I feel this decline should move a little way below the 1.2208 low and find a low probably by around Thursday or Friday. That tends to slot in nicely with the long U.S. July 4th weekend which should see activity slow down. From next week I’d be looking for stronger gains to resume towards my eventual 1.3200-50 target by the end of July.

Now, if this is to be reflected in USDCHF and GBPUSD in a broad move very clearly the long term through July will be Dollar weakness. For this week it is possible for the correlation to slip in and out of its schizophrenic coma but overall it should limit the Dollar’s losses against these two currencies and generate some intervening corrections. Therefore the emphasis will have to be on identifying GBPUSD stalling points on the upside, USDCHF on the downside, to generate the corrections as the Euro pushes lower.

A word on USDJPY… It’s still pretty tough as the moves are rather similar to the progress of a snail with the intermediate slip from its rock that sends it off on a sharp move. What is unclear is whether yesterday’s dip to flirt with the 88.97 low will generate a deeper correction or a quick dip to marginal new lows (20-30 pips maybe) before that deeper correction. However, it does seem to me as if it will slip below at some point and where this next dip ends is going to be important. I don’t think we’re going to see it above 90.20-30 at this point. For those that follow the cross it does seem to suggest a lower EURJPY, especially as it rejected the offer of completing a double bottom yesterday and this has generated a good deal of vulnerability to losses back to the 108.06 low at least.

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. (+10 pips)

Good luck
Ian Copsey

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

Monday, June 28, 2010

The Dollar has failed to take advantage of the bullish window… care advised…

Friday wasn’t quite the day I had been looking for. There can be little doubt that the market’s preference is to sell on any rally and by far the most vulnerable currency pair has been USDCHF which has lain down and died. I have had to spend a great deal of time furiously tapping on the keyboard looking for the right structure this morning and I have to say it has been tough… As a consequence, while I have attempted to identify the key areas I don’t hold a great deal of confidence in these so please do take care.

What the current position boils down to is whether we’ll see direct follow-through lower or whether we’ll see minor follow-through followed by a moderately deep correction. Looking at 4-hour momentum there is a fairly good chance of seeing some fairly strong bullish divergences so the potential for a deeper pullback after minor losses does seem to hold the stronger hand of cards. The next problem is identifying just where this current move will stall to generate such a pullback…

I shall highlight the areas I feel have the greatest chance, but once again please make sure that you see a good solid trade set up for this. At a minimum the 4-hour divergences must remain intact and preferably generate an hourly bullish divergence. In considering this and the bearish state of hourly momentum right now it would suggest that we’re going to need a pullback before long to generate these hourly divergences.

By tomorrow I hope to have a stronger hold on the next move. However, what I do note is the situation in USDJPY and EURJPY. In the cross any break above Friday’s highs will confirm a double bottom and will therefore be overall bullish (though bearing in mind potential for pullbacks – but not too deep.) However, USDJPY doesn’t look healthy at all right now and I do see potential for a retest of the 88.21 low. I do actually feel that this next decline should generate a correction and we’ll have to see how strong that is. However, what this may imply is that EURUSD will be carrying the weight of the cross on its back and suggest solid gains before long. However, maybe we’ll have to wait until tomorrow before that really takes hold and drags EURJPY higher with it…

AUDUSD has begun the day/week on a strong note and does also have potential for a stronger follow-through higher. However, the old 0.8858 high area may well provide a cap in the meantime. USDCAD… very mixed here. Overall I’m beginning to feel there is potential for a larger consolidation but there is still a window of opportunity for a bearish structure to develop also. I’d steer clear of this until it confirms its intentions…

Today’s free analysis is for EURJPY and can be found on http://www.fx-forecaster.com/DailyForecast.html along with Friday’s Trader Package Review & Trade Set up report. (+50 pips)

Have a profitable week
Ian Copsey

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

Friday, June 25, 2010

All being well today should see the Dollar rally again…

Well yesterday mostly went my way albeit with a few deviations along the way… The end result though was the Euro reversing within the zone I has suggested, GBPUSD falling between two stones and USDCHF making a minor new low but therefore does provide a good idea of its final stalling point before the downtrend resumes.

At this stage there is little more I can add to yesterday’s comments. Assuming I get my way today we’ll see the Dollar rally to see EURUSD to a lower low, USDCHF back to its corrective high (possibly plus up to 20 pips) and GBPUSD may have potential all the way back to 1.4686 again… There is just one small risk that we could see one more push lower for the Dollar before the strength I expect develops…

From that point there could be some deviation between them. GBPUSD and USDCHF should see new extremes but I am more doubtful about EURUSD. It’s possible to see that rally to new highs but we’ll have to see the reaction from today’s Dollar highs (or perhaps it can stretch into Monday) to see how aggressive the move will be. Well, that we’ll have to wait for. Today we can just concentrate on the Dollar’s rally…

USDJPY and EURJPY did what they should ’a too… USDJPY ended just 9 pips below the 89.30 target while EURJPY stalled at the higher end of the 109.30-52 range. The reaction so far has been positive and I feel we’ll get follow-through but until key swing highs in both are broken we’ll have to retain an open mind since momentum didn’t provide the best of reversal signals. Indeed, if USDJPY breaks below 89.21 and then the 88.97 low I would really begin to get a bit concerned.

Overall it appears to be in a weekly consolidation and I have felt that the consolidation top has probably not been seen yet. If we see break lower then we could be seeing a different picture… Back above 90.50-60 USDJPY and 111.12-35 EURJPY would bring increased confidence.

AUDUSD lost out over the day as expected and I still feel this should extend losses a bit further. On USDCAD I am beginning to consider a larger daily consolidation which could take us higher again…

Today’s free analysis is for GBPUSD and can be found on http://www.fx-forecaster.com/DailyForecast.html along with yesterday’s Trader Package Review & Trade Set up report. (+40 pips)

Have a great weekend
Ian Copsey

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

Thursday, June 24, 2010

Yesterday confirmed a second corrective rally for the Dollar…

It didn’t quite take the route I had expected but the test of the high end of the 1.2190-10 EURUSD support has broken the immediate trend and means we’ll have to wait for longer to reach the 1.3200-50 target. In fact, after the next push higher for the Dollar it has a strong risk of seeing a fairly long period (maybe most of next week) of consolidation.

Basically it’s going to mean that we’re going to remove the “trend” cap and put on a “this is going to be messy cap.”

First off, just concentrating on today and tomorrow there still needs to be one more rally for the Dollar. I can’t see that there’s very much left to go in this correction – probably minor new Dollar lows – before this second leg develops. Therefore emphasis in the first half of today should be on spotting Dollar buying opportunities. Probably by the end of tomorrow we’ll have to turn round and look to sell again…

If there is any European pair that causes slightly larger confusion it’s GBPUSD. It has come pretty close to what I had as a final target. At the moment the peak it reached yesterday is perhaps more indicative of just a recycling of the correction but this will not leave too much elbow room on the topside before it reaches target. However, a recycling of the correction would not last the whole of next week – in fact only until tomorrow… Therefore, either we’re going to see it reach target today and then drive strongly lower or there has to be an alternative, possibly higher target. This is a situation that needs more care.

USDJPY… well, that correction didn’t last long. In fact, it turned out to be quite a shallow irregular triangle. It does still seem to have one more leg to go but there’s little left on the downside now. Even EURJPY is suggesting the same so the implication does appear to be for a strong recovery in both… It does seem to fit since I am looking for the larger sideways range trading to continue so a consolidating European picture tends to slot in quite nicely.

AUDUSD has further to dip similar to the Europeans. USDCAD has me somewhat bemused but if anything I favor this reversing lower too…

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. (+145 pips)

Good luck
Ian Copsey

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

Wednesday, June 23, 2010

Yesterday’s moves have made me a lot more cautious…

I’m really not quite sure what to make of yesterday… In many ways there hasn’t been any key levels break in the Europeans. In fact, the bounce from 4 pips above the 1.4682 support in GBPUSD looked just about perfect. USDCHF didn’t make new highs but that’s not a problem. EURUSD… well… this one hangs on a thread. This is the pair that has me concerned.

At 1.2251 the low was just above the critical 1.2241 swing low so there’s no break to the higher high - higher low bullish structure. The slight concern I have is in the nature of the decline which has internal ratios that are more in line with an impulsive (trending) structure. However, it is missing a new low so until we get that and the 1.2241 low is broken by more than 10 pips I cannot quite say that things have changed. But boy those ratios are convincing.

Well, that is confusing but there is a clear differentiation that will allow us to recognize what is happening. If this pushes below 1.2241-50 and down to the 1.2190-10 area it will imply a larger correction to the rally so far. It should correct higher first but it will imply another low later. On the other hand, if the 1.2280-90 and then 1.2317 corrective high breaks first then the direct Dollar decline remains valid. If EURUSD makes new lows then GBPUSD will probably trade in a sideways consolidation and USDCHF will manage a deeper pullback higher too.

USDJPY just couldn’t muster up enough enthusiasm to push higher and is once more on the brink of losses. It probably has the same ambiguity of the Europeans and given that its recent history has displayed excessive corrective structures we’ll have to stay alert here too. Overall I remain bearish but we have to overcome the near-term uncertainty.

AUDUSD is much in the same position – could be poised to move in either direction but I have found the downside becoming more probably. USDCAD is moving in line with underlying ideas and does still have potential for a second push higher before the correction ends…

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. (+65 pips)

Good luck
Ian Copsey

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

Tuesday, June 22, 2010

Today should be an up-a-bit… down-a-bit day…

Well, not everything went my way yesterday. There were some doubts in my mind yesterday due to the Dollar bullish divergences and it seems to be those which generated the deeper pullback than I had been anticipating. This should mean that the correction should continue today, possibly with some ups and downs but I think the situation may well be resolved by the end of today or perhaps early tomorrow.

The underlying impression is still Dollar bearish within a larger correction so this correction/consolidation is just a temporary holding period within the entire picture. Again, EURJPY may well be a possible indicator in this consolidation. As you know I’ve been looking for this to rally to above 114.00 but it has chosen to follow a more sideways path, the pattern morphing from a triangle to a flat type correction that still looks as if there is a dip to come before it can rally.

I still see EURUSD being the driver for that rally which should still see USDJPY dip following this pullback – again much deeper than I had expected. I was a bit disappointed with the lack of follow-through but considering this decline in USDJPY should be a correction the more complicated route doesn’t really change the larger structure. That larger structure does still seem to imply a broad 89.30-92.10 range trading for a while longer yet.

Both GBPUSD and AUDUSD did well to force a new high and as such remain within their basic respective uptrend. Actually, of the two, AUDUSD may even have a chance of making a new high today… GBPUSD doesn’t seem to have any chance. I still favor a marginal new low here in line with the up-a-bit… down-a-bit Dollar expectation today.

Finally USDCAD… Just as I thought the coast was clear the Loonie lunged back… I still feel this is just a correction but does seem to make the ultimate target much lower… Before that a down-a-bit… up-a-bit… pattern should work.

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. (+65 pips)

Good luck
Ian Copsey

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

Monday, June 21, 2010

Targets met and pullbacks due but how deep and how long is the big question

We broadly saw the Dollar perform close to overall expectations though this morning’s little gap lower for the Dollar provided the final push to reach these targets. It does seem as if we’re now seeing the anticipated corrections so key now is identifying how complex these will be and when they will complete. It’s not impossible that today could complete the corrections and probably no later than early tomorrow. The underlying direction for the Dollar remains lower and the risk of a deep correction does appear pretty slim.

That should keep the Dollar weighed down for most of the rest of the week. I am in two minds about the overall extent of the losses as I can’t see that we’re that far away from key lows in USDCHF, probably GBPUSD also. However, what does confuse is the much more ambitious targets in EURUSD. I’m going to approach this carefully and keep an eye on the wave development across all currency pairs to watch for a correlated approach but if anything is to give way then it looks like being EURUSD.

Another issue that confuses is EURJPY which I had expected to reach above 114.00 on Friday but which instead took the day off on Friday to extend the tight range trading. Already we have seen USDJPY correct quite firmly but I’m a bit reluctant to call for a total reversal higher as I still feel that there is further to go on the downside. In turn quite how EURJPY will react is not clear but for now stick with the range.

AUDUSD has confirmed a more bullish structure also, albeit a little earlier than I had expected but does have further to go. Equally, USDCAD failed to see any deeper pullback higher and is resuming its downtrend. A move below 1.0000 does look in the cards.

Today’s free analysis is for AUDUSD and can be found on http://www.fx-forecaster.com/DailyForecast.html along with Friday’s Trader Package Review & Trade Set up report. (+60 pips)

Have a profitable week
Ian Copsey

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

Friday, June 18, 2010

Finally the Dollar resumes its losses… more to come but probably limited today

I was caught out on those deeper pullbacks yesterday and on looking back of course I kicked myself for not considering that alternative. The one I found most strange was USDCHF although GBPUSD was pretty confusing as well. However, it was USDCHF which pushed me into yesterday’s decision and the degree of losses also took me by surprise. It has made rapid progress towards what I had considered to be the final target while EURUSD has comparatively seen quite conservative gains. This is going to need EURUSD to make some pretty rapid gains next week to catch up…

For today we are still “mid-wave” and this should limit any corrections and from what I can see the chances favor Asia doing very little with sideways range trading the likely result. Once this has completed, which should be in early European trading, the move which began yesterday should follow-through. I don’t see this as being a frenetic move but more of a tail-end decline that should generate a moderately deep correction – basically to the move which began yesterday. For any position takes identifying the end of this should provide a decent trade.

This is echoed in GBPUSD which seems to be taking a labored rally from the 1.4346 low and most probably will continue that way. It does still have room on the upside but should lag behind EURUSD as we go into next week. Another echo sounding is in AUDUSD which failed to really match the strength seen in the European currencies. That isn’t too far off a peak – and an intermediate one I think – therefore should correlate quite closely in direction but probably less in the actual size of the move.

USDJPY… I almost breathed a sign of relief that it actually made a sizeable move. I want to say that it should continue lower. Well, it should as momentum is looking pretty darn bad but there’s also the potential for a choppy sideways move, maybe even a small breach on the downside and a recycling of the correction. We have to be prepared as very clearly it’s not a currency pair with any mission at the moment. Let’s just say the downside still looks vulnerable but there could be a trick or two up its sleeve today…

Perhaps the chance of a sideways move is more likely if I consider EURJPY… This has moved into a sideways range but does seem very close to completion. It still has that upside risk I have been banging the drum about so once this consolidation is complete it should rally – but is more likely to be carried on its way by the rally in EURUSD. A massive follow-through is not expected so that rules USDJPY rallying, but also would argue against it declining too…

Finally, the good old Loonie… has gone loonie but seems on track to make a rally today but once this has made minor new highs it is due another push lower. However, I suspect that will come next week.

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. (+0 pips)

Have a great weekend
Ian Copsey

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

Thursday, June 17, 2010

A shenanigan within a shenanigan can be as bad as a correction within a correction…

It’s a fascinating pastime attempting to identify price structures in order to understand what’s going on and where price will go. Corrective structures are the complicated sections and when you get corrections within corrections the world seems to implode for me… Well, now we’re getting shenanigans within shenanigans…

However, one way of another I do feel today will finally set us on our course, whichever that will be… but if I have my way it will be the resumption of the bearish Dollar correction.

Yesterday provided some complications which is not an entirely unusual event. While EURUSD remained stagnant USDCHF actually made downward progress. Given the fact USDCHF has a much closer corrective target it does bring a certain amount of concern. Maybe it will just be a deeper correction, events which can tend to occur in daily charts.

However, the stronger signal appears to be coming from GBPUSD and I feel this along with EURUSD could well provide us with clues. Basically, as far as I can see, to keep both of these pairs alive and bullish GBPUSD should remain above 1.4669-82 while EURUSD moves sideways above 1.2270 (initially below 1.2325.) While these two events match we should see a break higher. Now, quite what this means for USDCHF is that it cannot break back above 1.1322-38. Ideally it should move lower directly.

Now, we still have EURJPY on its route to the 114.13 target. That still seems to be quite solid. What is annoying me are the shenanigans within shenanigans within shenanigans within shenanigans in USDJPY. It certainly hasn’t been able to really state its bullish claim and is still at risk of another dip lower. However, I would really prefer that it waits just a bit to allow EURUSD to take the cross higher.

Now, assuming I’m right in all this the initial Dollar losses shouldn’t be dramatic as there are corrections to be had on the way. This is reflected in AUDUSD also which is still steadily making headway. I have had a target at 0.8755 for a pullback but there is risk of this occurring from a little below. However, it is tending to display the potential to correlate with the Europeans.

USDCAD – must now climb to above 1.0359 or suffer another bungee jump below 1.0223…

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. (+35 pips)

Take care & good luck
Ian Copsey

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

Wednesday, June 16, 2010

A definite case of the shenanigans…

It all started off quite straightforward yesterday. There was a little bit of to & fro but then Europe came in and the shenanigans hit in a different way to what I had in mind. GBPUSD rallied from just below the 1.4685-03 support area and towards the sort of resistance area I had outlined. However, I didn’t expect EURUSD to follow, or USDCHF…

Now the next bit gets a bit more complicated. The highs in GBPUSD and EURUSD seem to have good ratios to suggest they were still part of the correction. This will mean that the correction should recycle back to around yesterday’s lows. The 1.1292 USDCHF low was close enough to an extended decline from 1.1672. However, if that is the case then we should be expecting a much deeper correction. If we see a deeper correction in USDCHF then the GBPUSD & EURUSD structures break down…

I can only come to the conclusion that yesterday’s high in USDCHF was the end of the pullback – around 33% from the 1.1730 high. This will mean that while GBPUSD and EURUSD should return to yesterday’s lows USDCHF cannot.

Next problem: EURUSD does seem to have risk of quite a move up to the low 1.30’s, another 700-800 points maybe. USDCHF only appears to have potential down to just below 1.1000 … thus just another 300 points…

Next problem: EURJPY only appears to have potential to 114.13 – for the moment anyway. If EURUSD is to go to the low 1.30’s then USDJPY will need to crash… which even if it does I feel it will be limited. In fact, when I looked at yesterday’s decline it actually looked corrective and thus the next move bullish.

Well, something’s gotta give somewhere… Maybe my EURUSD target is too high. Maybe EURJPY will see just a small correction from 114.13 and then extend further higher. (I prefer this outlook.)

Therefore we have to be aware of the different possibilities and understand where a scenario breaks down. I’ll remain with a directly EURUSD bullish view once this pullback ends and then judge from that point. However, note that momentum is fairly Dollar bearish so follow-through at some point, whether this be after a pullback or direct, does look the more vulnerable side.

Even AUDUSD is beginning to look pretty bullish too. There should be a pullback from around 0.8740-60 but after that extend further.

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. (+40 pips)

Take care & good luck
Ian Copsey

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

Tuesday, June 15, 2010

The Dollar should now correct higher – probably quite deeply – but take care of early shenanigans

Yesterday was pretty good. EURUSD met its target, USDCHF didn’t quite but did bounce from a higher projection. All-in–all this points to a correction higher for the Dollar and I feel this is going to be quite deep due to the slight differences between EURUSD and USDCHF, the latter probably requiring a correction to 1.1600 at least.

Now, before leaping from the starting blocks we have to be aware of some potential complications in the first half of the day. Following this first recovery we are around initial Dollar resistance levels around the 1.2185-05 EURUSD and 1.1440-65 USDCHF areas. This should cause a correction. That bit is fairly simple.

Where we need to pay attention is in EURJPY. This too did very well to reach to the 112.58-96 area and stall but this should not be the end of the rally. I still feel this needs to visit the 114.00-20 area from where it too should see a more substantial correction. Given I am bullish on USDJPY the implication is that EURUSD will drive the cross lower. Therefore, to judge where EURUSD will stall in the anticipated correction higher we shall need to take into account the expected target in the cross. As long as I am right on USDJPY then the top in EURJPY should be generated by the top in EURUSD…

GBPUSD was much, much stronger than expected and I’m a little unsure whether this has found its high. It is possible, but then I do also see the potential for a minor new high before that reverses. Given I’m looking for a deep correction higher in the Dollar we should equally expect the same in GBPUSD and there is some suggestion that we could see a complete recycling of the correction back to 1.4346… That’s a bit of a call and there are some alternatives so we’ll need to be more careful here.

I was disappointed with the performance from USDJPY but I think we can begin to see gains once more. It still looks like a slow grind higher but I do prefer the upside here.

AUDUSD looks to have broken the downtrend for now. There is potential for a new high but we shall be due a correction lower before long. USDCAD bounced perfectly from its support but I don’t think there’s much more on the upside. More likely the risk here is for a sideways consolidation…

Today’s free analysis is for GBPUSD and can be found on http://www.fx-forecaster.com/DailyForecast.html along with yesterday’s Trader Package Review & Trade Set up report. (+70 pips)

Good luck
Ian Copsey

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

Monday, June 14, 2010

The Dollar should make further downside progress but soon make a temporary low

Friday was a little better. Not everything went entirely in the way I expected but overall the move is progressing close to the underlying template. This current decline in the Dollar has a little more to go but I can see some support coming up that should lead to a correction that may last until the end of the week – or perhaps just Thursday. Since this is a correction within a correction we have to be aware that it could be pretty messy so take care.

Therefore the day’s objective should be to identify the final lows and I’ll highlight the sort of areas I feel have the greatest chance of providing those lows within the individual analyses. There is one exception which is GBPUSD that failed to make new highs on Friday and suffered a much deeper correction. This tends to argue a larger sideways correction before the next leg higher. While a few days away what we should be attempting to look for is the end of the GBPUSD correction to tie in with the Dollar’s corrective highs in EURUSD and USDCHF.

USDJPY… While I was writing the weekly indicator review (http://www.fx-forecaster.com/files/Weekly_Review_Support_Resistance_11th_June_2010.pdf) I looked at the weekly chart and first thought was “what a mess it has been since 87.10 way back in January 2009.” Normally the term “mess,” apart from being an adjective for my daughter’s room, basically implies a corrective structure. So I had a long look at the idea this morning and while it’ll probably still take some while to work through I think that’s what we’re seeing. Trying to work this into the short term it should mean we’ll still see more gains.

Add to this the fact that EURJPY also looks bullish and by the end of today I’m expecting EURUSD to top out the conclusion is that we’re going to see some solid gains in USDJPY. It’s just a matter of how this develops in terms of the ebb and flow in the individual components of EURJPY.

AUDUSD… well… this is confusing me as I have been looking for a high here too not far above the old 0.8548 high. However, what that appears to imply is new lows – and I mean below 0.8065… Given the fact I’m not that bearish in EURUSD (and indeed, in the larger picture I am bullish) I do find some conflict. So for now I’ll watch for the expected high today along with EURUSD and then watch the reaction.

USDCAD… Quite possibly a little lower again but then a pullback but all within a larger bearish move.

Today’s free analysis is for USDJPY and can be found on http://www.fx-forecaster.com/DailyForecast.html along with Friday’s Trader Package Review & Trade Set up report. (+20 pips)

Have a profitable week
Ian Copsey

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Friday, June 11, 2010

There are days and “those” days… yesterday was the latter…

“Those” days are frustrating! I’ve been planning this larger reversal for days… then go and mess it up… Thankfully Hare Kiri swords are not easily available in Tokyo these days otherwise I may have done some shopping…

The Dollar has turned and we are now seeing a correction lower. It has some way to go. To give you an idea EURUSD should visit 1.3200-50 and USDCHF to 1.1068 at least, possibly even 1.0930. Being a correction however, the questions are just how it will develop and how long it will last. My feelings are that it should be at least a month or maybe as long as a month and a half…

However, first things first… we have to see where the current decline is going to end? To be honest I think the majority of it is over. A correction is still due before the target is reached but probably by end of today we’ll see the correction begin to develop. The next stage of the correction within the correction is more like flipping a coin and will be where price will need to be studied to see how it will complete the move, whether it will be simple, complex, fast or slow…

USDJPY… well, it did everything I asked of it yesterday. It dipped back down to 90.83, recovered to 91.40 to make the descending triangle look like a solid odds-on bet… then it broke higher… Lesson one: never anticipate a pattern – wait for confirmation… Given the pullback in EURJPY it seems that similarly the downside target there is not about to be met. Thus the overall risk does appear to be higher… well, for now at least. We’ll still need USDJPY to break cleanly above the 92.07 high, but assuming it does, we should be seeing some steady gains. Overall, EURJPY looks as if it has potential back towards the 114.13 high…

AUDUSD did move higher as expected but has exceeded the cautious target. Likewise a correction is due here but there are still new highs to come but maybe not far above the 0.8548 high. USDCAD declined further. However, that’s coming up to support that should generate a deeper correction too…

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. (+55 pips)

Have a great weekend
Ian Copsey

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

Thursday, June 10, 2010

All being well, this should now see EURUSD decline to target

EURUSD continued its pullback (thought just a little higher than expected) and USDCHF made its low below 1.1426 which were the requirements for the final Dollar rally against the Euro and possibly the Pound too. The lower low in USDCHF confirms the 1.1730 high as the final high so this pullback, while it will probably be deep, should not break above 1.1730…

I have also been dabbling with the DJIA which has been moving in tandem with EURUSD and which has a probable target around 9,530-50 and at most 9,330-35. This should spark a solid recovery and thus does seem to correlate quite nicely. Everyone seems to be bearish here so should trigger some solid short covering.

So for today and what could now be into tomorrow, we’re going to have to concentrate on the move lower in EURUSD and try and identify the pullbacks. This should see a brief low around the old 1.1877 low before it can follow-through lower so this is where some delay may occur. It seems as if GBPUSD is going to follow-suit. I still have some larger reservations on this but for today I think we can apply the same approach as we should with its European (at-arms-length) compatriots.

USDJPY… this does seem on the soft side but may just hold to a range for much of the day but I suspect an eventual break lower now. This should still be within the larger range so I don’t expect new lows below 88.97. Part of the reasoning here is linked to EURJPY. Its deeper pullback yesterday seems to beg a spike decline to its target. The decline in EURUSD doesn’t appear to be enough and will require USDJPY to move down also. However, EURJPY is in a similar area of its own wave structure as EURUSD and should probably hold the 107.80-108.10 area on the first decline. It is therefore the second drop that will probably require the frenetic nature of a spike decline. Keep this in mind as all three pairs develop.

AUDUSD seems to be a crazy mixed up kid at the moment but overall I still see this in a sideways consolidation within which we are probably around the central zone. I am bearish overall so keep that in mind but I’m not sure this is going to move in tandem with the others.

USDCAD is not just crazy & mixed up it almost looks like its on speed… The general erratic development needs to begin to map out some decent relationships in order to identify the pattern here…

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. (+80 pips)

Good luck
Ian Copsey

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

Wednesday, June 9, 2010

Just a little more consolidation and then we should see the final spike higher

That was a pretty messy day. However, there were two clues yesterday which we need to heed. First, the length of the pullback in EURUSD has been rather long but not too deep while the drop in USDCHF is beginning to suggest it may have seen its major high already…

If these two observations are correct I suspect that what we shall need is a marginal new high in EURUSD but also a marginal new low below 1.1426 in USDCHF. This low in USDCHF would imply a pullback that has every chance of being deep. The marginal new high in EURUSD should complete its correction and send it to new lows where it should complete its decline. This may occur by the end of today or may just stretch into tomorrow. However, I suggest watching for the two events and then observe bearish Dollar trade set ups…

One confusion is GBPUSD which made a minor new low yesterday but is recovering. I’m not 100% clear on the eventual outcome since even if we get this pair declining along with EURUSD it would not appear to complete its overall decline… This is a situation that needs be watched. However, I don’t foresee this breaking below the 1.4231 low at this point.

USDJPY… This has been quite a headache. It hasn’t been doing what I think it should be doing and while there may be consolidation today there appears to be a growing risk of a subsequent decline within an overall broad sideways consolidation. The issue this raises is whether this correction began at 94.98 or from the 88.97 low – the difference between eventual bullish and bearish follow-through…

Still, along with this situation I feel that while EURJPY needs just a little more sideways consolidation the outcome should be a move below 105.00. This will then depend on whether USDJPY drives it or the anticipated spike lower in EURUSD… We shall need to observe the balance but it does tend to imply that USDJPY should remain range bound for a while longer.

AUDUSD is till due a lower low while USDCAD should now (finally) begin to rally…

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. (+0 pips)

Good luck
Ian Copsey

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

Tuesday, June 8, 2010

It looks like the final Dollar push higher risks being choppy

Yesterday wasn’t exactly what I’d expected, but not too far off. I still view the current Dollar strength as mapping out the last stages of this part of the bullish structure. I will be expecting further gains further down the road and if I’m to hazard an estimate then it could be sometime in August or maybe September if the anticipated intervening correction develops slowly.

This means for now we’re looking at buying Dollars on dips. The biggest uncertainty for this time is whether the market found a penultimate peak yesterday or whether we’ll see modest follow-through today before a second pullback ahead of the rally’s finale. I’m tempted to say we will see further highs today on the back of USDCHF and possibly GBPUSD although such an extension in EURUSD would be a bit too deep for the eventual 1.1712 target I have. However, we have to also consider the deeper EURUSD target around the 1.1640 weekly swing low.

Thus, for today we’re going to have to see what develops and act accordingly.

We should also keep an eye out for EURJPY. I suspect the more suitable development here would be sideways range trading. It has a minimum target at 104.59 and also one at 103.19. If USDJPY drops more sharply then there’s an even deeper target at 100.50… However, to reach these will require a consolidation to develop today. Today therefore has potential to be quite a tight range trading day or we’ll see movements between USDJPY and EURJPY more-or-less correlated with some built in lags that would allow the extremes of the range trading to be achieved.

AUDUSD looks as if it can eventually break below 0.8065 but as mentioned yesterday I don’t see any excessive losses at this stage while the greater risk after seeing those lows would be a return to the 0.8548 level at the same time as the Europeans move through their corrections after this Dollar rally is complete.

Equally, USDCAD seems to be pointing to the same outcome with 1.0730-75 appearing to be a strong contender to a peak on this part of the move.

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. (+145 pips)

Good luck
Ian Copsey

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

Monday, June 7, 2010

The Dollar resumes its gains against the Europeans but I think we’re not too far off a major low…

At long last the confusion appears to be settled. The trigger for me was the pullback in USDCHF that reached just above the higher 1.1418 support and the drop to below 1.4550 GBPUSD… These confirmed their corrections had ended and along with confirmation of losses below 1.2066 EURUSD the Dollar pushed higher over the rest of Friday.

While I would have liked to have been more definite about that event the moves have added more clarity with the interesting point being that I really don’t think we’ll see a massive follow-through and by midweek, maybe, we’ll see the end of this current move. In turn I see the pullback being much stronger and sustainable. I don’t think it’s the end of the overall rally as weekly momentum is still pretty bullish. Therefore I’ll just expect a substantial correction, the biggest we have seen for some while.

There is just one ambiguity I don’t really like and that is the decline in GBPUSD does seem to be lacking somewhat and I’m just a bit concerned that will not find its target at the same time as EURUSD and USDCHF… I’ll watch this as the moves develop.

USDJPY failed to rally as strongly as I’d envisioned and this morning has approached what I feel is critical support at 91.06… I’m just a bit concerned as momentum doesn’t look that positive – and at the same time EURJPY does appear to have further to go on the downside – its overall target way down at the 101-104 area that seems to me to imply more than just weakness in EURUSD. Therefore, take care with this one. I’ll have to see how this develops.

AUDUSD has reversed lower too and does seem to have further to go - at least to the 0.8065 low, possibly lower. I’m tending to favor this being a complex correction that would cause a recycling higher back to 0.8548 but the problem is when. I think we’ll have to watch this in conjunction with the expected Dollar high against the Europeans and match these with the normal complex expansions that occur…

Finally USDCAD did see another low and is now pushing much higher. I don’t expect a new high here an tentatively look for this rally to fall short of 1.0800…

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. (+95 pips)

Have a profitable week
Ian Copsey

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

Friday, June 4, 2010

USDJPY should continue its push higher while more care is required for the Europeans

Yesterday was always going to be tough. I’m not really sure it’s going to change today. Being the day when the market gets its monthly caffeine injection through the non farm payrolls it often means that the market will be reluctant to push the Dollar through any significant support of resistance. That said, in the Europeans that leaves quite a wide trading range to go for…

At first glance EURUSD and GBPUSD look as if they may even be developing triangles which would keep things pretty tight until early next week while USDCHF is presently doing a fairly decent impression of lying quietly in a morgue. The upshot of this perception is that Dollar-Europe remains in a corrective pattern and that implies choppy, erratic and inconsistent. It should allow EURUSD and GBPUSD to recover within their ranges and for USDCHF to turn a whiter shade of gray.

The larger picture does of course remain Dollar bullish and that should be kept in mind but do be aware that there are still a few hurdles to overcome before that uptrend can be said to have resumed. A new low around 1.2066-96 in EURUSD is not impossible and yet still see a reversal higher. If it gets much beyond there, and USDCHF rises from the grave and breaks to new highs then we’ll be seeing greater strength.

USDJPY… rallied well and still seems to have legs to follow-through. I think we’ll have to take care as it approaches the 93.53-63 area though… Now, perhaps the one to watch in all this is EURJPY. It has calmly recovering and has completed two-thirds of its correction. It still has a little way to go and shouldn’t get to its 115+ target directly but this could be the signal for EURUSD to resume its bungee jump…

As long as AUDUSD can break above yesterday’s high it can also continue its correction higher but still within the larger bearish structure. USDCAD still seems to have further downside to go…

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. (+70 pips)

Have a great weekend
Ian Copsey

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

Thursday, June 3, 2010

There are still some inconsistencies that could cause some more whippy moves…

For the Europeans in general yesterday I have to say the results were inconclusive. GBPUSD started on its way to 1.4810 but then stalled some way before target. As a retracement I could accept this and call for losses. However, the internal relationships also messed up completely and that has left me scratching my head…

The continental Europeans had a day off, seeing choppy range trading with the market unwilling to commit in either direction. Standing back I still can’t find convincing wave relationships in the decline from 1.2670 EURUSD and if I have any preference then I’d like to see one more minor new low here and then a total reversal. The issue with this is the potential implications for USDCHF and GBPUSD… both apparently having limited room for any more significant Dollar losses.

On the flip side, there really isn’t much of an argument to suggest the Dollar rally has come to an end. Momentum remains bullish and therefore this appears more to be a correction only. However, it seems the market requires a catalyst and perhaps this will mean that we shall see today being very similar to yesterday as the market waits to see the impact of the Non Farm Payrolls tomorrow. Technically it will be helpful to see a more definitive move to start catching up on structural relationships.

The more successful currency pair yesterday was USDJPY which has forged higher but hasn’t quite reached the 92.58 resistance. I still see this area between 92.48-58 as important but from the way price progressed yesterday I don’t see this as the end. Sure, I think we’ll get a pullback but the intermediate target appears to be shifting higher once again. Thus, look more to buy on dips still.

This also appears to be reflected in EURJPY which had a positive day as expected also but failed to really impress. I see risk of a pullback here and potentially a recycling of the correction back to 110.78-98 before it can push higher again.

AUDUSD had an initial decline but the recovery has been constructive – look for a retest of the 0.8539-48 area eventually but take care around 0.8460 first. USDCAD came lower at long last. This too seems to have further to go but there is risk of initial consolidation.

Today’s free analysis is for GBPUSD and can be found on http://www.fx-forecaster.com/DailyForecast.html along with yesterday’s Trader Package Review & Trade Set up report. (+130 pips)

Good luck
Ian Copsey

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

Wednesday, June 2, 2010

All that yesterday’s price action added was complications…

Erratic? That just about summed yesterday up... Often such sharp moves can narrow down the alternatives to be considered and certainly it did take out one or two I have been observing. However, the reactions from yesterday’s extremes have introduced additional complications in terms of identifying correlated movements across the European currency pairs.

Just to point out what I feel are key issues:
GBPUSD reached its ideal retracement resistance for the correction. However, there is a deeper one at 1.4810.
The 1.2110 low in EURUSD appears more likely to be related to the 1.2446 high but the depth of the recovery rules out a normal complex correction which renders this pair open to a new low and recovery or perhaps a much stronger rally to retest the 1.2670 high. However, this would imply a break of 1.4810 GBPUSD…
The move in USDCHF could be considered a complete correction which would imply the underlying rally resuming…

There appears to be conflict between these apparent scenarios which are hard to reconcile. Therefore I’m going to be pretty conservative with the analysis today and outline both sides of the coin as best I can. Very briefly it would appear that either we’ll see direct Dollar losses to marginal new lows or the risk of direct follow-through in the larger Dollar uptrend… What will be important is identifying just where one scenario breaks down to confirm the alternative.

However, one pointer may well be EURJPY which I feel stands more chances of recovering. This may well develop from a stronger USDJPY (which itself also has a few issues) but the sort of recovery I’m looking for would probably require both EURUSD and USDJPY to remain firm to strong.

AUDUSD looks like remaining in range but probably with a downward bias. USDCAD must rally above 1.0565 else it risks a second decline…

In summary, today will require some observation to identify the most likely outcome by watching for factors to make or break alternative scenarios. Until any definite directional move develops take care.

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. (+55 pips)

Good luck
Ian Copsey

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

Tuesday, June 1, 2010

It looks like the erratic range trading is here to stay for a while longer…

Friday began positively. I even began to get moderately bullish for the Euro but then it all caved in and triggered position squaring ahead of the long weekend to cause the entire structure to revert back into rather messy confusion. I really can’t see much of an alternative – unless the Dollar resumes its rally but the overall correction doesn’t yet look complete.

This means we’re going to have to remain on our guard for what may be the rest of the week… The day has started with the Dollar pushing higher but I’m not convinced that this will be sustainable. I remain with the view that USDCHF still needs to see a deeper correction lower before it can extend its gains so for now I retain the view that we are seeing a correction within a correction with all the untidy baggage that tends to belong to such events.

USDJPY came through firmly and made decent upside progress. I’d like to think this can extend its gains further but any pullback should be limited for now else this may well also turn into another sideways consolidation that frankly would appear to be quite horrendous and could last quite some time. My preference is bullish here but I’m treating the current move with some care and waiting for price to provide greater evidence that my bullish suspicions are valid… Ideally this shouldn’t move below 90.75 to retain that outlook.

This loosely fits in with EURJPY that ended a corrective move on Friday at 113.67 and is currently seeing a pullback. It doesn’t appear to have met its upside corrective target yet and should therefore extend these. Hence the outlook for EURUSD to extend gains (within range) and for USDJPY to maintain its bullish structure appear to fit into this scenario.

Much can be said of AUDUSD though once again I think we need to be flexible. It is going through a correction but what we now need to see is whether this avoids a retest of the lows or whether it will become more complex. USDCAD… looks bearish but the current structure doesn’t seem to fit into the larger scheme of things. Take care with this one too.

So, very clearly, the overall message is that care is going to be required. I still tend to feel that we should be selling Dollars into rallies but making sure that entries are confirmed with some decent set ups. Take your profits early and don’t expect to make a killing right now.

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. (+110 pips)

Have a profitable week
Ian Copsey

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