Pages

HARMONIC ELLIOTT WAVE

Friday, July 30, 2010

The turn is imminent… today maybe … or Monday…

Please note that The Daily Forecaster will be taking its summer break from the 9th-13th August


Yesterday saw the right reactions from both USDJPY and USDCHF to play catch-up with the Euro & Pound which maintained their gradual, rather choppy & sloppy rallies. In particular the latter pair maintained the gains in just about the right degrees to keep the basic bullish structure intact. There should be a slight deviation between the two earlier today as EURUSD needs to see a slightly deeper correction now while GBPUSD just needs to maintain a sideways consolidation. The resultant pushes higher should ideally take us to our target.

In particular GBPUSD does look like forming that rising expanding triangle – not quite as I had expected yesterday – but may well bounce from the support line today. This pattern is rarely seen but the implication is normally really quite dramatic with a strong reversal indicated so watch that one in particular.

USDJPY extended its losses, not yet to the 86.25 low but the next decline should take that out quite easily and I don’t really expect too much of a reaction there, if at all… USDCHF too dropped like a stone once the 1.0537 low was breached. Clearly these two still have a lot more to do to if they are to reach the targets I have been anticipating. Of the two I am more confident of USDJPY but there is a valid higher target that we need also observe. I think the approach should be that all these four majors should be approaching respective targets at the same time which will help decide at which of the two USDCHF will finally stall.

However, clearly these latter two need to make pretty solid losses like yesterday and should therefore provide the better return on the day.

AUDUSD … rallied well from support but not well enough. I think it will make new highs but not sure these will be particularly strong. My concern here is that it does still seem to point to a larger bullish structure, way beyond the equivalent sort of areas I’m expecting in the four majors… It does bug me a little as if the Greenback is going to rally again I can’t see it happening without the Aussie losing out. Therefore take care with that one.

USDCAD… ahhh… that’s just USDCAD… However, yesterday’s action does tend to favor the upside…

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. (+60 pips)

Have a great weekend
Ian Copsey

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

Thursday, July 29, 2010

The Dollar decline is showing strong signs of exhaustion and stress…

Please note that The Daily Forecaster will be taking its summer break from the 9th-13th August


The Dollar decline is showing strong signs of exhaustion and stress…

Yesterday was a tough old day… In most currency pairs the support & resistance levels performed exceedingly well but I can’t say the Dollar progressed quite in the manner I had envisaged. What it has done is provided pretty uniform signs of stress; daily bullish divergences across the 4 majors and price development which can hardly be described as rampantly bearish…

It’s a tight call but I can’t see that we have yet reached the final stalling points. The problem is that there is very limited wiggle room in which price can move before the entire decline begins to get… ummm bottom light… (That’s the opposite of top heavy I guess…) This will mean that we need the Dollar to make further inroads on the downside today but probably not by too much to allow a correction to still remain below Dollar resistances to permit a final dip to, or close to, targets.

The two which had threatened a deeper correction through their respective double bottoms (USDJPY & USDCHF) seem to have run into problems. Certainly the reversal from the 87.97-18 resistance which I have touted for some while worked very well and the decline does appear too deep to retain a bullish stance. USDCHF has made the deepest pullback it could within a bullish structure so break of 1.0537 would bring it back into line…

However, what also strikes me is the targets I have for these two which require quite a strong push lower in what appears to be an ever-shortening time period. GBPUSD is fine – it has met minimum targets already and should continue with its slow grind higher after a correction. Likewise EURUSD can be said to have met minimum targets, so it’s just these other two which bring to mind a sudden rush, maybe tomorrow, to at least attempt to get to new lows even if these may not be the ideal levels I have been targeting…

So today should be pretty similar to the past two days with pretty messy sideways moves followed by some gains to minor new highs but it looks more likely that the final Dollar lows will occur tomorrow.

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. (+45 pips)

Good luck
Ian Copsey

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

Wednesday, July 28, 2010

Price targets have not been met but there are growing signs of a reversal

Please note that The Daily Forecaster will be taking its summer break from the 9th-13th August


Price targets have not been met but there are growing signs of a reversal

Yesterday sprung a few surprises… The rallies in USDJPY and USDCHF actually matched the rallies in EURUSD and GBPUSD… well, sort of… Furthermore, USDJPY & USDCHF confirmed their respective double bottoms which tend to point to a retest of 89.14-21 and 1.0730-50 respectively. Indeed, these look good structurally also.

All this has put me in a slight quandary. GBPUSD has already met its minimum upside target but EURUSD has not… However, it has approached an area which is implied by a more complicated pattern that would imply a recycling all the way back to 1.2670-1.2731… That’s over 300 points which appears rather dramatic and would be contrary to the indications seen in EURJPY… Meanwhile, GBPUSD has come to a point where it needs a correction from yesterday’s high.

Now, given that 3 out of the 4 majors are signaling a correction I can go along with this. I do envisage the moves in USDJPY and USDCHF as corrections and therefore should still point to new lows. A high in USDCHF around 1.0750 will imply required losses of around 600 points, from 89.21 USDJPY around 450 points and from an anticipated 1.54-ish type area in GBPUSD a rally of 300 points or if aggressive then 400 points. These could all work out but it does leave the situation in EURUSD somewhat clouded and this is where we need to take care.

I should add the same caveat I mentioned on Monday in which I did warn that bullish Dollar divergences are building up in the daily charts – and this now includes EURUSD after yesterday’s marginal new high – so while I am persisting with the view that we still need further Dollar losses all round we have to remember that EURUSD has made a standard bullish correction already and now even GBPUSD has met minimum targets. It still does leave USDJPY and USDCHF a little mixed but given the fact we’re talking about weekly patterns I these two I wouldn’t fight too much if we start seeing a stronger Dollar recovery. It is still best to keep this alternative in mind.

AUDUSD is pretty much in the same boat but does concur with the need for a correction now. USDCAD is poised between retesting the 1.0138 low and just following through with the bounce from 1.0255…

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. (+75 pips)

Good luck
Ian Copsey

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

Tuesday, July 27, 2010

Probability favors a continued push lower for the Dollar…

Please note that The Daily Forecaster will be taking its summer break from the 9th-13th August


Well, the combination of time-based targets failed yesterday. It’s not a big bother and actually suits my outlook. However, I really do feel the final reversal is not a million minutes away… As is normal the pace of the extension between the four majors has been rather unbalanced with GBPUSD providing the stronger move which breached the 1.5470 high from two weeks ago while the remaining three amigos trailed in its wake. This is something which needs to be addressed by the latter group to ensure they all arrive at their anticipated destinations around the same time. This doesn’t look likely today but more by Wednesday or Thursday… Well, I could add Friday also if we are truly to see a totally uninterested market…

However, we should find things should heat up once the old Dollar lows are breached – at 1.3027 EURUSD, 1.0394 USDCHF and of course April’s 1.5523 high in GBPUSD. I find it hard to consider any major recycling of corrections now and therefore the move should be consistent at least. It’s just a matter of how slowly it develops. However, with the possible exception of GBPUSD it is difficult to see the daily Dollar bullish divergences breaking down at this point.

Just a note on USDJPY which dipped well after breaching the prior 87.56 high to apparently confirm a double bottom; The length of time spent above that high was sufficiently brief to suggest this was not a double bottom per se but merely a 3-wave move to complete a correction. The decline has been solid and while a small pullback is possible I feel this should be making its way lower to last November’s lows.

This is going to potentially throw a spanner in the EURJPY cross works… The price development of the latter, while bouncing perfectly from the 113.47 resistance has done so in a manner which tends to argue against the stronger rally I had begun to believe was possible. If it is to retain that higher target then EURUSD has to rally independently and leave USDJPY pretty much static. I do feel there is going to be one more high but we may have to be satisfied with somewhere a bit lower. I think we need to judge this as the cross’s parents arrive at their targets…

AUDUSD still bullish but seems to be slowing slightly but the coming high appears not to be the final one… USDCAD continues to confound and I remain wary of this pair until a stronger signal is generated.

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

Monday, July 26, 2010

I can’t see much change in the status quo…

Please note that The Daily Forecaster will be taking its summer break from the 9th-13th August


Today is meant to be interesting from a timing perspective. It is a full moon day, a Gann date and also indicated by other timing methods as a key moment when a larger reaction is due. I have been bearish Dollars for some while now but of course for me the key is whether targets have been met and whether momentum supports a reversal. However, from this perspective I have my doubts although I have to say that the reversal signals are beginning to appear but not uniformly.

In the daily chart EURUSD has made what I term as a “standard” retracement level – one from where many corrections stall. I had felt EURUSD was due a slightly deeper correction though. Daily momentum hasn’t generated a bearish divergence but it is close…

USDCHF has not met target but does have a bullish divergence. GBPUSD… well, targets are difficult to quantify here though it has failed just below the key daily swing high at 1.5523 and does have a bearish divergence. USDJPY hasn’t met my target at the old 84.82 low but is in a weekly structure that could make up rules as it goes… However, there is a daily bullish divergence. That makes three out of the four major currencies showing slowing Dollar bearish momentum.

I think what we can say is that the threat is definitely present and as we move forward from this point we have to acknowledge that a reversal can occur at any time.

However, if anything Friday’s price action appears to work in nicely with my adjustment to a holding pattern which would be a precursor to a final dip in the Dollar. In other words, I am anticipating a resumption of Dollar gains and it’s more a matter of “when” rather than “if” in my mind and I am still more biased towards a final extension of the current move rather than an immediate reversal.

Therefore, I feel that this week we should alter our approach slightly by adding a bit more caution and being aware of the reversal risks. For now I remain neutral until the current holding pattern is complete and probably then for the final push lower… However, keep one eye over your shoulder from this point forward.

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. (+40 pips)

Have a profitable week
Ian Copsey

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

Friday, July 23, 2010

Something’s afoot… and it’s not 12 inches…

Please note that The Daily Forecaster will be taking its summer break from the 9th-13th August


Yesterday’s analysis was a bit of a mess really. What’s more the Europeans began to diverge once again, well briefly anyway. More telling was that the structural development just didn’t coincide with what I feel should be happening. When this happens it suggests some other event is occurring, a morphing of the corrective structures that risk extension of consolidation patterns.

First of all EURUSD just didn’t correct low enough which left the normal projections exceeding target. GBPUSD also failed to reach target and saw a pullback, one which looks more like a correction recycling rather than the start of a fresh bullish attempt. USDCHF … well that just remained itself.

Even USDJPY failed to press the 86.25 low fully and even this looks like forcing a new corrective high. Most telling for me was EURJPY which appeared to complete a full corrective structure from the 113.37 high. The implication is a new high above 113.37… in fact I wouldn’t be too surprised to see an eventual move to as high as 115.78-06 now…

Even AUDUSD and USDCAD look like recycling corrections to retain a rather erratic and complicated near term outlook.

Overall this doesn’t alter the underlying belief that we’re going to see the Dollar lose ground to the targets I have been suggesting and that should always be kept in mind, but it does look as if the corrections are going to become more complicated assuming my observations are correct.

Thus, if I have any broad outlook today it does look like we’re going to see the Dollar correct higher early in the day and then see that reverse to generate marginal new lows before the whole move recycles. Thus, take care today and it does seem to warn of some choppy reactions…

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. (-11 pips)

Have a great weekend
Ian Copsey

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

Thursday, July 22, 2010

The Europeans appear to be converging on targets to see the Dollar resume losses

This has all taken much longer than I would have preferred, but never-the-less from a price perspective the moves seen yesterday are beginning to home in on retracement areas where I feel we’ll be able to look for the next leg lower for the Dollar. Taking a further step back daily momentum is reacting well and allowing for the development of Dollar bullish divergences over the coming week. Thus, the converging of time, price and momentum conditions appear to be positive for the anticipated outcome.

Back to today we have not quite completed the correction but this should be achieved probably in European trading or early North American trading. It suggests a rather slow start to the day, as usual in Asian trading which should allow a pullback to yesterday’s Dollar gains that should eventually turn back to the upside for the attack on the retracement targets. These areas do seem to slot in well for the projection targets for the entire Dollar bearish correction…

Where I have some doubts and confusion is in USDJPY and EURJPY… Ideally I would like USDJPY to make one more attempt higher. It has actually done just enough to satisfy a correction to the decline from 89.14 but one more push would help. However, EURJPY doesn’t seem to fit in with this. When I came to this pair my immediate thought was not just bearish but very, very bearish. Yesterday’s decline appears to have confirmed 113.37 as the final high and therefore we should be seeing the new decline begin.

However, as much as that seems inevitable now the prospect of EURUSD rallying by late today and probably quite quickly and the downside developing in USDJPY which I feel should be more sedate doesn’t add up to significant weakness in the cross. Being EURJPY one of its favorite pastimes is consolidation. I’ll probably use this as a litmus test to judge how things will develop. Let’s just say the vulnerability to losses is now present but let’s wait until it presses its case before reacting.

AUDUSD failed to progress as I had expected and I now see the 0.8730-40 area as important support. I think it will hold early in the day but we’ll need a stronger recovery to avoid a subsequent extension lower. USCDCAD remains whippy with yesterday’s losses much deeper than I had anticipated. However, the late rally appears constructive so while 1.0455-65 supports we should still see gains…

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. (+110 pips)

Good luck
Ian Copsey

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

Wednesday, July 21, 2010

Maybe the Europeans are beginning to converge…

It was another day where the unexpected occurred. EURUSD suddenly blipped to a marginal new high and was followed by a stronger reversal while USDCHF became a spectator and GBPUSD continued its persistent decline. This may be the catalyst for the deeper correction in EURUSD which I have been expecting to see. It’s still going to require some rather unusual developments similar to yesterday to really satisfy my demands of EURUSD but yesterday was an encouraging pointer that it may occur.

This should be reflected in a less robust way in USDCHF which may just manage to surmount the 1.0600 area while GBPUSD has less potential today. If it does make a new low it should only be marginal as the degree of pullback from the 1.5470 high is now bumping on fairly important support levels.

Thus today we’ll have to watch how initial trading develops. At the same time we musty be aware that the main direction is Dollar bearish for now and today should provide the last window of opportunity for the losses to resume. I still feel this will be the last leg lower so keep an eye on medium term momentum conditions which are already beginning to build up the beginning of possible daily Dollar bullish divergences…

USDJPY has confirmed that it’s in a correction higher and that too appears to be coming to an end and I fancy today providing the corrective high also. We have to keep in mind the situation in EURJPY as well and this could be crucial and to me there is still some question market over which of the component majors will trigger the next move. Yesterday’s up-and-downer almost seems to set up the possibility of a final push to the 113.81-06 area. If this is to occur then I’d judge that it needs to do this early while EURUSD can pullback higher together with a firmer USDJPY before declining… Any other route would appear to involve too much volatility…

AUDUSD remains firm and should extend higher again today. I fancy USDCAD doing the same also – as long as the 1.0390-00 area supports…

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. (+120 pips)

Good luck
Ian Copsey

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

Tuesday, July 20, 2010

Conflicts between the three Europeans persists

I was hoping the differing situations between the Europeans would clear themselves up yesterday. Instead they actually become more pronounced. Normally when I see this happening it will come down to one of two things: either I am looking at a count that will see a marginal new extreme and then followed by a deeper correction or; the trend resumes directly. At this point GBPUSD and USDCHF appear to satisfy the latter situation. It is EURUSD that I find more complex as ideally that should be correcting lower more deeply to both satisfy normal corrective behavior and also adjust the projections for what I feel will be the final rally to the final target. Right now the projections would imply a much higher target…

Clearly something needs to happen to correct this “imbalance” between the Europeans and that means a sharper movement in EURUSD compared to the others… However, attempting to forecast on that basis rarely sees the perfect eventuality develop. Therefore we are left with a dilemma that needs to be understood in order to be able to react when prices begin to react… We should also keep in mind that the Dollar downtrend has a time target around the beginning of next week which implies any correction now needs to be completed by today or early tomorrow to give time for the extension to meet targets.

USDJPY pulled back a little higher than I was anticipating. It is still a in a position where it is caught between two alternatives. I am expecting a move down to the 84.82 low and this also implies one of two alternatives: either we see a dip to the 85.70-90 area followed by a pullback above yesterday’s high before the final leg lower or; we see the pullback deepen directly to be followed by the decline to target.

Unfortunately, trying to decipher the problem is rather like a quadrilateral equation with three unknowns… I am actually more in favor of EURJPY having seen its high although there is a risk that we could see sideways consolidation. If I am right, then the question is whether USDJPY leads the decline or a bearish correction in EURUSD leads… It is further complicated by the fact that even if we see EURUSD correct I am still expecting quite a sizeable rally compared to a more limited decline in USDJPY and this still points to a fairly stable cross…

Therefore, right now the entire near-term situation is rather complex and this means we’ll have to be fleet footed to react as things develop. This should also be considered against the underlying backdrop of a still weak Dollar and the expectation of one more low before a larger reversal.

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. (+0 pips)

Good luck
Ian Copsey

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

Monday, July 19, 2010

I have some uncertainties but feel that we are due a stronger correction

Friday basically produced moves close to expectations but with some complications. EURUSD overshot my target, USDCHF failed to reach its target while GBPUSD spent the day correcting lower. I find the larger wave relationships for the extremes so far not really in line with normal projection ratios and this raises the uncertainties.

However, the depth of the correction in GBPUSD suggests that we have found a temporary high at 1.5470 and that needs to continue the correction now even if a pullback is initially possible. I am also anticipating a fairly deep correction in EURUSD which raises additional uncertainties as I can’t see these being reflected in the other two Europeans as they have already begun their respective corrections. Therefore, the moves in EURUSD need to outstrip the other two. In particular USDCHF doesn’t appear to have much elbow room to do very much at all…

Therefore I’d like to approach the start of the week with care but considering the risk appears to be for a final end to this larger bearish correction in the Dollar by the beginning of next week there also doesn’t appear to be much room for any pause in the correction. It does really need to get done with it by tomorrow or Wednesday…

USDJPY has extended losses as expected and should see marginal follow-through in the first half of the day but a correction is due here also. I remain targeting the 84.82 low again but it shouldn’t be direct and ideally the Dollar lows should coincide across the 4-majors. This tends to place the risk in EURJPY to be erratically lower. I’d like to call for an end to the correction at the 113.37 high but until the 110.67 swing low breaks there does still remain some uncertainty. The potential is for some rather messy trading this week until EURUSD finally finds its peak next week.

AUDUSD continues its correction lower but it is challenging some key support levels around 0.8617-23 which could change the complexion of the larger wave structure. I’d prefer to see how this develops, especially considering the one week outlook for the Dollar to reverse higher… USDCAD has also become disillusioned with the downside and further strength is therefore implied and I would be too surprised to start looking for the 1.0851 high again…

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. (+35 pips)

Have a profitable week
Ian Copsey

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

Friday, July 16, 2010

Dollar losses continue but we should be approaching a temporary low soon

Well, GBPUSD and USDCHF decided to play catch-up with EURUSD with Dollar losses extending through my support levels. In retrospect, given the standard correction to 1.2522 EURUSD it will imply a deep correction once this leg higher is over. For it to then reach the 1.3200-50 are thereafter it must also see a deeper correction. This is the guideline of alternation between key corrective waves.

So, with momentum still Dollar bearish we can expect limited corrections again and the prospect of further losses. I should warn that as we approach what I feel should be a major corrective Dollar low towards the end of this month the risk is for an increase in volatility and wider swings in price so more care should be taken from this point onwards.

Now, the interesting developments seen yesterday were the strong extensions in USDCHF and GBPUSD. Taking the former first the lack of any significant correction since the 1.1730 high continues to point to the fact this is more likely to be a corrective move. The comment I made above about alternation relates to trending moves. Therefore it appears that this decline we are seeing now is the penultimate decline. It should cause a correction before too long – just as I envisage in EURUSD – but then the two can plan their finale to reach their overall targets over the next 2 weeks in time for the Dollar reversal.

GBPUSD has continued its rally and is not that far below the 1.5523 swing high. I feel this will likely be tested and possibly marginally break (by 20-30 pips maybe) on this move higher. The very breach of this high will imply the downward move is complete from 1.7041. Just as its European buddies are still due to make gains against the Dollar so should the British Pound. That will imply that in the subsequent reversal higher in the Dollar that should see EURUSD move to new lows, both USDCHF and GBPUSD should not breach their respective extremes seen in June.

USDJPY – maintaining the decline well. It still has a move down to around 86.00-30 approx but then due a pullback. The outcome for EURJPY is therefore clouded and will depend on what moves first – the EURUSD rally that could extend the upside in the cross into the 113.58-81 area (max 114.06) or whether USDJPY beats it lower with its own losses… Take more care as we should be approaching a reversal soon…

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. (+55 pips)

Have a great weekend
Ian Copsey

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


Thursday, July 15, 2010

The Dollar extends losses but not quite uniformly…

While the Dollar made the expected losses it made hard work of the process, most of the day seeing consolidation before the blip lower. The exceptions were perhaps GBPUSD which made steady headway and USDCHF which failed to move to new lows.

The implication as this process continues towards a more significant high in EURUSD that should provoke a longer moderately deep correction is potentially quite interesting. On the assumption that we do see this move in EURUSD the risk is that USDCHF will make only minor new lows and this would threaten a complete recycling of the correction to 1.0675. Equally, if the move higher in GBPUSD slows the same implication is suggested in terms of a recycling of the correction back to 1.4946.

The Dollar is already beginning to build up possible bullish divergences in the 4-hour chart to support this development and as the process of the current correction lingers over the Asian session we could approach these Dollar support levels by the end of today or perhaps into tomorrow.

USDJPY failed in its second attempt at the 89.14 high and has returned close to the 88.02 low but has corrected higher. There is a potential double top in both USDJPY and EURJPY – patterns worth noting – and as long as the key supports break we could be facing a more sustainable decline. The slight fly in the ointment is EURJPY which should ideally actually make a new high above 113.40 before it declines. However, it is treading a fine line having fallen just short of target and judgment is going to required if the downside breaks prematurely…

The AUDUSD rally is losing a bit of steam which concerns. I still prefer a bullish outlook but with more frequent looking behind me to watch for corrective dangers. USDCAD is doing what it does best in trying to confuse the heck out of the market…

As mentioned yesterday, I view all that’s occurring now as a prelude to a final push higher in the Dollar into the August/September timeframe where I see a confluence of weekly structures coming to an end and which should allow the very bearish Dollar cycles begin the final multi-year push to significant new lows in around 2-3 years.

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. (+60 pips)

Good luck
Ian Copsey

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

Wednesday, July 14, 2010

It seems I was too aggressive on the deep pullback – Dollar downtrend resumes…

That low at 1.2522 EURUSD was a valid retracement target. I had been expecting just a little more. However, the reaction higher to new highs has all but confirmed resumption of the uptrend. Perhaps the only risk is a total recycling of the correction back to 1.2500-22 but, while not totally impossible, would appear to make the entire correction from 1.2722 to be totally out of whack.

So, it certainly seems as if we’re on our way higher to the next target levels which should be the penultimate highs before the final push to the low 1.32’s. This seems quite straight forward. However, it has left the correction in USDCHF rather blinking in confusion as the Euro races ahead of the Swiss Franc for the first time since the Dollar highs. I won’t rule out a recycling here but it’s touch and go at this point. The bigger implication of this is that the structure of the decline in USDCHF has begun to look for corrective rather than impulsive.

In many ways I view this quite positively as it does tend to fit in the weekly picture quite well, this being a potential triangle which will require one final (daily) rally to complete the entire pattern. Given that following the anticipated high in EURUSD over the coming week or two I will be looking for a new low in EURUSD the two tend to confirm each other quite nicely. GBPUSD has me more cautious and I’m less inclined to look for new highs just now (or significant ones) for the consolidation to continue.

USDJPY caught me out with the new low and reversal. I still see this as a pullback and not a rally to new highs and should therefore remain below 89.14. In fact it has helped out EURJPY. It’s bounce from 110.67 yesterday was interesting in terms of the degree of retracement and does point to a retest of the 113.40 high. The sooner turn around in fortunes of EURUSD is going to help the cross out to reach that high and probably just above.

In turn it does mean that USDJPY needs to decline back down to 86.96 and then the 84.82 low. As I described the situation in USDCHF, the same applies to the situation in USDJPY. The anticipated decline to 84.82 also appears to be a penultimate leg in a weekly triangle so will need one last rally before the larger monthly trends all confirm the Dollar’s demise once again.

AUDUSD looks firm – and probably stronger than anticipated. USDCAD should reach its 1.0201 (approx) target.

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. (+15 pips)

Good luck
Ian Copsey

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

Tuesday, July 13, 2010

This correction appears to have potential to be quite choppy…

The correction has progressed and interestingly more aggressively in USDCHF which had seen the stronger losses. It has certainly not finished yet but the manner of the decline in EURUSD is beginning to suggest a wide swinging 3-leg move lower. Here the 1.2480 low is likely to be approached today. It may be tested but more likely fall slightly short and from here a fairly deep correction possible.

What will be interesting here is how USDCHF reacts. There are a couple of scenarios I am looking at here but both probably require a little more on the upside, one would imply quite a deep retracement higher. The key issue here is how USDCHF will react while EURUSD sees a deeper correction higher. Ideally, USDCHF should subside into a messy sideways to lower correction. Following this it will be easier to plan the next move.

The third European, GBPUSD, had its own agenda with its sharp drop. Now, this looks to have completed a full corrective structure. That doesn’t rule out additional ones but it does imply a correction higher today along with the other two. I’d prefer to hold my distance from this until it reveals its corrective intentions… or otherwise…

Onto USDJPY the 89.20 resistance was only 6 pips above yesterday’s high. There is a good argument for this to have marked the full corrective high. However, I don’t see any downward move being direct at this point and could cause quite a deep correction. It does beg some attention and care. This is amplified by EURJPY. It didn’t manage to move above the 112.66 high but the move lower does appear more corrective and this tends to slot in with the expectation of both EURUSD and USDJPY seeing corrections higher. However, whether this reaches the 113.40 high again does still seem doubtful to me but a closer attempt would satisfy a retest.

AUDUSD has moved sideways and is likely to remain in a range today. However, I do feel that once this is complete (probably by the end of today) the correction should extend lower as described yesterday. USDCAD is holding its cards close to its chest. I am still basically bearish but feel just a little concerned about yesterday’s correction. Ideally, if I’d want to do anything here I’d prefer to wait for a move to around 1.0201 or a break higher…

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.

Good luck
Ian Copsey

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

Monday, July 12, 2010

The correction has finally begun and has potential to be moderately deep

Finally it had to happen, even if it was much later than I had originally anticipated, we have seen the Dollar bounce and this should extend until tomorrow at least and probably into Wednesday but I doubt for much longer. In some ways it probably won’t appear to be too deep but for the retracement it is making it should be deeper than normal. This is also highlighted in USDCHF which, after all, failed to follow-through lower and has maintained its position above the 1.0480 low. I have been pointing out the lack of a decent correction for some time but the momentum which had been carrying this lower finally stalled and perhaps now we can see a decent correction. GBPUSD too has made its reversal.

However, as much as I feel this will continue it has potential to be quite slow and messy. I feel the Dollar can push a little higher first thing today but not by too much and a correction will very soon be seen and this could take up to early NY trading. The benefit should be the ability to look for better buying levels later in the day.

USDJPY didn’t reach its target on Friday but should today. Probably, as long as this rallies at the same time as EURUSD corrects higher we could see EURJPY moving higher also but I’m beginning to doubt whether it has legs to reach the 113.40 high again… Thus, be aware of the risk of an earlier reversal which could be quite sharp if USDJPY & EURUSD both turn lower at the same time. This should be the beginning of the drop back to test the 84.82 low in USDJPY so expect a decent decline once the corrective high is seen.

AUDUSD still looks positive overall but I doubt it’ll reach a new high as a deeper correction is due here also. USDCAD extend losses more directly than I had anticipated so now we have to be aware of a move to the 1.0200 area more directly.

Today’s free analysis is for AUDUSD and can be found on http://www.fx-forecaster.com/DailyForecast.html.

Have a profitable week
Ian Copsey

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

Friday, July 9, 2010

The lack of reversal is getting rather tiresome... but there is still an argument for a correction

Well, there is no doubt that the Dollar bearish momentum has slowed but the lack of reversal has been rather frustrating. However, the more this develops in the same way – and I may have to extend my downside targets just a bit more – the momentum picture continues to deteriorate. Dollar bullish divergences are deepening in the slightly longer term intraday charts and it’s just down to the hourly charts where we need a swirl of cream on the top. While EURUSD is in a slightly different position in its structure compared to GBPUSD and USDCHF, the latter two do seem to be requiring a deeper correction. EURUSD could just get by without one but the entire structure would benefit from a sizeable correction.

So we are left with some early wiggle room for limited corrections across all three but we still have the risk of new Dollar lows lurking in the background. I’m not sure whether the decline could slow any further and therefore we must see a make-or-break move today one way or another…

USDJPY… the pointer from EURJPY gave this away yesterday quite nicely. The high at 112.50 was just 6 pips above the intermediate resistance and I still feel this is going to be at the center of proceedings today. I have to say that I don’t see much more room on the upside for USDJPY though there should be another push higher today. However, for EURJPY to reach back to the 113.40-60 area we are going to need EURUSD to push a little higher also. The implication at 113.40-60, and check out momentum conditions when we get there, is for a reversal lower and probably to new lows. Thus, the combination of both USDJPY and EURUSD reaching targets around the same time may well prove to be a catalyst for all three to collapse…

AUDUSD was strong. I’m not too surprised be back close to the 0.8858 high but hadn’t anticipated such a direct move. It may well just tip over 0.8858 but a correction is due so be aware of a possible correction starting soon after breach. USDCAD moved perfectly into its target area and that too is now due a pullback, and possibly longer consolidation, before the next leg lower…

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. (+40 pips)

Have a great weekend
Ian Copsey

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

Thursday, July 8, 2010

I was clearly too hasty in declaring a corrective top in EURUSD… but maybe today…?

I had in mind a short term cycle low in the Dollar yesterday and this prompted the call for a deeper correction. I now face a choice between considering the cycle high was delayed by a day or we actually already seeing the downtrend resume directly. However, what concerns me about the latter is the sheer lack of a deep correction in USDCHF. It’s something I’ve been pointing out for a while and clearly it hasn’t been going my way, but I can’t shake this off.

In USDCHF hourly momentum is still dragging lower with no sign of a bullish divergence but it still exists in the 4-hour chart and the 8 hour chart. These are certainly not to be ignored. In EURUSD the 4-hour bearish divergence remains and there is a threat of an hourly one developing now which didn’t occur at the 1.2661 high. The same can be said for GBPUSD. So the threat still most definitely remains and until we see a break above 1.2710-20 EURUSD, below 1.0434 USDCHF or above 1.5253-83 GBPUSD we still need to exercise care. While I am overall Dollar bearish I still feel that a pullback at this stage is required for the structure I am looking at.

USDJPY seems at last to be making a more emphatic move. Well, emphatic within the 86.96-88.45 range… As long as the current correction can sustain itself to reach the 88.23-45 area I still feel there is risk for a dip again. However, I am quite aware of the situation in EURJPY which does seem to be on its way higher. It shouldn’t be a direct rally with possible stalling points around 111.10-25, 111.85 and 112.44 but while this recovery is possible either USDJPY or EURUSD has to drive this. If EURUSD breaks above 1.2710-20 then the upside is clear. However, if it holds then quite obviously USDJPY has to be sitting in the driving seat. If there is any stronger doubt in my mind then it’s in USDJPY…

AUDUSD has resumed its rally strongly but it’s due some corrections before long. I don’t see them as being particularly deep but I don’t think the rally will be as direct as the past two days. USDCAD has almost certainly broken down and this morning has even broken the 1.0466 swing low. There’s a small bounce to be seen not far lower but overall look for losses now.

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. (+70 pips)

Good luck
Ian Copsey

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

Wednesday, July 7, 2010

Has EURUSD topped or is there one last gasp higher before the deeper pullback?

In line with my comments yesterday EURUSD followed through towards the 1.2670 corrective high, falling just short. That may be the high I was looking for… or possibly there’s one minor new high to come. If that is seen I do mean minor as I can’t see this moving above 1.2700 and more likely would not break the 1.2670 level by too much… The reason for the caution is more that hourly momentum has not provided a bearish divergence to match the 4-hour divergence…

Now elsewhere I had less success. USDCHF only made a marginal new low at 1.0561 but at an interesting level which I dismissed yesterday. This and at most the 1.0541 support are indications that we may well see a total recycling of the decline from 1.0750 – and potentially see the deeper correction I have been looking for. GBPUSD has done the same and does not look like breaking above 1.5226. While that caps, the risk is similar – a reversal all the way back to the 1.4872 low…

So be aware of this risk, all suggesting quite deep corrections which should last through to Friday at least and maybe into Monday next week. Even if EURUSD doesn’t stretch to a minor new high the Dollar is due a pullback higher.

USDJPY spent the day frantically doing nothing at all, a rabbit caught in a car’s headlights. I still have a preference for a minor new low into the mid 86’s but equally we are due a recovery here also. This is going to impact on EURJPY which failed miserably in its attempt to follow-through higher. I’d say it has risk of returning to 109.14 again but the prospect of consolidation/correction in both EURUSD and USDJPY doesn’t really fill me with great confidence. This is definitely one to avoid for the moment I think.

AUDUSD is mixed. It did rally quite well yesterday but unless it gets above 0.8590 I’m not going to get too enthusiastic about the upside – for now at least. USDCAD disappointed with its decline and is in a similar situation to AUDUSD unless it can break below the 1.0466 corrective low.

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. (+35 pips)

Good luck
Ian Copsey

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

Tuesday, July 6, 2010

It looks like we should get some marginal new Dollar lows but a pullback is due…

The rally above 1.2587 EURUSD has ruled out any recycling in price back to the 1.2150 low and therefore we can consider this to be a bullish structure which still has some way to go… Having made that statement I feel we’re still going to need to exercise some care as I’m not convinced this is going to be a direct rally towards the eventual target.

The day has begun with the Dollar on a firm note. I can see one or two alternatives so we’ll need to observe how the early part of the day develops. My ideal scenario is a bit complicated but will basically involve a pullback into European time followed by a second decline but which should not fall below 1.2470. This would provoke a break back above 1.2610 towards the 1.2670 corrective high. It could stop just below or possibly even just above. However, from that point I would not be surprised to see a long, slow grind lower through to Friday before the next leg higher – to new highs.

The alternative would be a slightly deeper correction now perhaps back to 1.2410-40. If this occurs then I feel the risk will more directly bullish and for the rally to extend strongly above 1.2610 and 1.2670…

These are the scenarios I’ll be watching as a marker to decide how the rest of the week will pan out. Assuming the first alternative in EURUSD occurs then I’d suspect that USDCHF should see gains edge higher into the 1.0715-30 area before dropping more sharply. Equally this should mean GBPUSD should ideally remain above 1.5010-50. If these general guidelines begin to break down – opt for scenario two in EURUSD…

USDJPY … well, it held the 88.23 resistance well but has made a meal out of trying to push lower. It strikes me as a potential situation where we see a longer consolidation that may even see a retest of 88.23… Overall I remain bearish and it’s more about how the move lower will develop. Given that EURJPY, while it remains above 108.60-00, can still push directly higher I suspect that it is going to fend off any strong losses today to allow the cross to remain supported. If not… well, we have to consider what happens in EURUSD again.

AUDUSD has almost retested the 0.8316 low again today and this does seem to be the prominent risk. However, do take care around 0.8268-89. USDCAD has an awfully complicated structure but does seem set to push higher towards the target I have been eying for the past week…

Today’s free analysis is for EURUSD and can be found on http://www.fx-forecaster.com/DailyForecast.html along with Friday’s Trader Package Review & Trade Set up report. (+80 pips)

Have a profitable week
Ian Copsey

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

Friday, July 2, 2010

Has the Euro resumed its underlying rally or will the correction recycle?

With Monday being July 4th holiday in the States the next report will be on Tuesday


The start of the day worked perfectly on many fronts but it seems I was looking for a more complicated scenario. The Dollar follow-through lower was pretty aggressive and the temptation is to assume the underlying Dollar decline has resumed. Well, I can’t totally rule it out but I think we’re going to have to be cautious until key levels are breached. Until that point the whole correction can recycle all the way back to 1.2121-50…

In many ways there is a good argument to suggest it will. USDCHF resumed its losses equally aggressively and I’m even contemplating a test closer to the 0.9909 low. However, the missing link remains – the elusive deep correction. In the vast majority of trending waves (as opposed to aggressive corrections) will have a correction of at least 50% of one the directional waves. We haven’t seen that yet… It is in desperate need of this and I’ve been surprised at how far this particular move has extended. The advent of the EURUSD correction recycling and a deep pullback in USDCHF do tend to dovetail but here we have to identify where this may occur. Well, I have my thoughts and will highlight the higher risk levels. Remember also that this is a long weekend and could well have an impact.

USDJPY has forced it way lower and is also in need of a deeper correction. There is a little more to go on the downside but watch out pretty soon. The combined potential for both EURUSD and USDJPY to see corrections is going to complicate the EURJPY cross. I am quite mixed in terms of whether we see it recover or make a new low before a recovery but possibly within an overall bearish structure. USDJPY does eventually look like reaching the 84.82 low but it will not be direct. Thus some caution is required for EURJPY.

For AUDUSD I feel the current levels around 0.8491-06 are important to determine whether it continues its rally or sees the downtrend resume. For USDCAD the low seen over the past few minutes at 1.0566 also appears to be important. Breach would deepen the correction but overall I do feel we should be seeing a new high…

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. (+35 pips)

Have a great long weekend
Ian Copsey

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

Thursday, July 1, 2010

EURUSD looks as if it as taken a more complex route lower…

That rally in EURUSD is too deep for a correction within the downtrend… What appears to have happened, just when it looked like the bearish track appeared to be on track is flip the balance and looks like it is developing in a more complex manner. My favored route is back higher to retest 1.2396 and maybe a few pips more in a recycling of the correction. Then the way will be free for the decline I thought we had already been seeing…

However, it’s a tight call and I’d begin to get wary if the 1.2196-10 area is broken. The difference between the two does make a big difference to the subsequent outcome once the final low has been seen. If this decline moves lower directly then it will trigger direct gains back above 1.2396 and to move to the final target. If we see 1.2396 first and then down there is an added chance that we could see a longer consolidation. We should soon see by which way price breaks in early trading which of the alternatives will develop – but I prefer the recycling back to 1.2396…

This should allow USDCHF to move further lower to its target, an event that should cause a much larger correction compared to any seen over the past 5-10 days. Equally, I am rather ambivalent to GBP. I do think it has minimal downside now – maybe none at all for today – and therefore we should be looking for gains along with EURUSD. The bigger question is whether it will see new highs or remain in a consolidation. Again, given I can’t see particularly good wave relationships as things stand now, I feel the risk may well be to new highs. However, that high would provoke a deeper and more sustainable period of consolidation.

USDJPY… Managed to get nowhere very quickly… I still feel bearish and mainly because we have not seen a deep enough correction to suggest the downside is complete. That should mean we see that correction now or from a minor new low. Between the two I’d prefer the latter, again as I feel the wave relationships would work better with a new low. This of course has implications for EURJPY. The low at 107.31 was a valid support that would imply a reversal back to the 113.40 high. However, there are lower levels that would also be valid. We therefore need to watch what USDJPY does first and whether this dovetails with EURUSD. The cross is one where we so need to take more care as it has a foundation for either eventuality. 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. (+125 pips)

Good luck
Ian Copsey

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