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HARMONIC ELLIOTT WAVE

Tuesday, August 31, 2010

It looks like the correction is going to take longer than expected…

Yesterday’s initial pullback approached the support areas that should hold while the Dollar can continue its correction lower but took just about all day in doing so. That takes the wind out of the sales somewhat when looking for a swift resumption of the current Dollar uptrend. It was even complicated by EURUSD and USDCHF both dropping at the same time – a factor that makes it tough to know when the European pair will move in a correlated manner…

However, more than any other the perfect peak at the 1.0308 resistance I pointed out yesterday is encouraging and barring any morphing into a complex correction (which I heavily doubt) this does look like making its way lower to target. Indeed, this looks as if it could reach target by late today or at the latest tomorrow and may well be an indication for the EURUSD and GBPUSD corrective peaks to be seen. With the recent lack of correlation that has a large caveat however…

So I feel that the Dollar should probably basically spend the day making gains against the Europeans and we’ll have to see how strong this develops. The currency pair with the more definable structure is USDCHF though…

USDJPY… ouch… Just a minor breach of 85.81 and solid reversal lower. I have to lick my wounds there somewhat and from the look of EURJPY which failed just below the ideal 109.82 resistance the downside remains the larger risk. Given the more bullish outlook in EURJPY that does tend to highlight weakness in USDJPY once again and this may well extend to fresh lows over this week. I’m still not 100% in favor of robust losses in USDJPY but I do find the alternative structure which would be a recycling of the move down from 94.98 quite a tough call to make. Having said that, I’m not really looking for EURJPY to move below 100 – or not by much – and with the larger picture in EURUSD being bearish it does imply a solid recovery. Still, that’s the background I am working with and we’ll have to judge reactions when they develop.

AUDUSD… maybe in a sideways consolidation. USDCAD also poised between two scenarios. Take care in both of these…

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)

Good luck.
Ian Copsey

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

Monday, August 30, 2010

Given the last two day’s results I think I should stop thinking…

Very clearly the structure I had been watching was completely wrong and this calls for an adjustment. It doesn’t alter my overall Dollar bullish view but does imply the current correction should extend a little further before gains begin to emerge once more. I do feel we’ll end the week higher again… Indeed, having reviewed I feel the correction could well end by either the end of today or perhaps just into tomorrow to leave the rest of the week allowing Dollar gains to resume.

With luck this should allow USDCHF to finally reach its long term target and then move back into correlation with the other Europeans as the Dollar begins to pick up again but this time we should see USDCHF maintain its rally with more sustainability. I would estimate that there is probably another 2-3 weeks of upside left in the Dollar before a deep correction – unless we get some catalyst that causes the market to become more rabid again.

Even the EURJPY structure, which had been working really well, broke down on Friday. I haven’t changed my overall bearish view here either – unless it extends too high… However, I see this potentially follow EURUSD to a peak and reversing lower. In fact, this may even be a sharp turn lower as USDJPY has just broken above a key resistance and may well be indicating a total reversal. There’s still some concern here but looking a bit more hopeful. If this does keep moving higher then we could see some solid gains.

AUDUSD – I can repeat much the same comments as I have above on a break in structure but here also I don’t think we’ll see runaway gains and look for a corrective peak before long to generate losses. USDCAD…appears to be approaching a short term low – whether this forces a new high or just a correction is less certain. Looking at the weekly chart and the basic consolidation for the past 6 months or so I have a greater feeling that this will continue until the Dollar finds the high in this 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. (+95 pips)

Have a profitable week.
Ian Copsey

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

Friday, August 27, 2010

What I thought would happen yesterday should happen today…

Yesterday is a day I’d rather forget. While there were a few decent calls the main directional moves in EURUSD & GBPUSD were 180 degrees wrong. I was particularly surprised with the depth of the pullback in EURUSD which, while not penetrating the 1.2771 resistance was very deep for the structure I have been contemplating.

Never-the-less, after a study of the structures I still remain bearish for these two although the eventual downside targets have been reined in. What’s more, GBPUSD appears to be closer to its low on this decline compared to EURUSD. Combine this with the extension in USDCHF and we have quite a mixed bag of potentially conflicting structures across the Europeans.

What it does boil down to is: today should see the downside in EURUSD and GBPUSD resume and should quite quickly retest the old lows but probably not extend lower before a pullback. It seems more likely that we’ll see the final lows early next week. For those of you interested there also appears to be a major low in the Dow Jones Industrial Average early next week too that should cause quite a rally.

As for USDCHF I am more confident of the final target now, the one I have been banging the drum about for some while though today should only see a minor new low before a pullback, possibly occurring early in the day before the larger declines in the other European pair really get on their way.

USDJPY… whew… I’m not really excited about the manner of the rally. It may just be one of those ratchety, erratic moves as I still feel there is a little more to go but as yet there has been no strong sign of a reversal and until that happens we have to be aware of one more dip…

What is much clearer is EURJPY which was probably the best bit of analysis on the day. I had hoped the rest of the move to 108.00 would have been faster but the resistance was perfect and does now imply losses. This should, for the most part, be driven by EURUSD but given the shakiness of the rally take care in USDJPY also…

AUDUSD saw a deep correction also but I think I’ve sorted that one out too – should also have a bearish day. USDCAD most probably saw its low. There is a minor risk of a new marginal one but before long this should extend its rally. I would prefer if this occurs directly…

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. (+0 pips)

Have a great weekend.
Ian Copsey

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

Thursday, August 26, 2010

There’s a good chance the Dollar should resume gains today

Yesterday went mostly to plan with a couple of exceptions but in some ways these have provided some additional clues to suggest the correction is close to completion.

The only real deviation from the central theme to which I referred to though felt it unlikely was the dip to 1.0247 USDCHF. This was in the target area I outlined if the overall downtrend had any chance of extending further and actually implies a correction to a little higher than current levels before another decline. This is going to conflict with the situation elsewhere with corrective highs expected in EURUSD and GBPUSD that should provoke the next decline.

I am trying to work out how all three can decline. I guess one option is that they do just do that – there’s no rule to say they can’t. However, there may be an alternative that keeps USDCHF in a consolidation while the other two make their moves to a point where they start a deeper correction. It’s possible that USDCHF will take that opportunity to make its final drop. I think the better option for now is to concentrate on EURUSD and GBPUSD and just be aware of how USDCHF reacts.

As for the EURUSD and GBPUSD I do feel we are close to an end to the correction with risk of just a marginal new high before they push lower. This seems to be echoed in EURJPY. The cross actually corrected much deeper than I had been looking for but overall I can account for that but it does appear to be in its final push higher from where we should see losses develop. Equally, as with the main two Europeans I am looking for the decline to extend a bit lower but then provoke a deeper correction. I anticipate the corrections should last 2-3 days to allow losses into the end of next week which should see a more lasting low and a stronger correction higher.

The expected decline in the cross may well put pressure on USDJPY also. It appears to be finding resistance but at this point I feel we shall see a correction only and not a new low. If we do see a new low I don’t expect it to be by too much. The triple (monthly, weekly & daily) bullish divergences should provoke a reaction higher before too long.

That leaves AUDUSD – very much in the same position as the Europeans although it did see a fresh low yesterday. USDCAD may well be in a sideways consolidation and I feel we need watch the retest of Tuesday’s corrective low…

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. (+30 pips)

Good luck.
Ian Copsey

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

Wednesday, August 25, 2010

The Dollar still has further to go but today has a chance of seeing the correction continue

Apart from USDCHF which continued to confuse and USDJPY which saw what the others were doing and decided to do the opposite… the Dollar gains were pretty much in line with expectations. First let’s cover the “normal” currency pairs that performed correctly…

EURUSD, GBPUSD and EURJPY all lost ground and remain the driving force for the Dollar’s gains and stalled at or close to projection targets, the former two being perhaps a little lower than even I had thought. The retracements from their lows have been sufficient in terms of depth to provide a complete correction but not to the fullest corrective potential. Thus, we have a degree of uncertainty over whether the downside just resumes or we see continued consolidation and possibly then the deeper corrective targets met. All have targets for this part of the decline around 150 pips lower. These lower targets should once again provoke a correction – but a correction only – so be aware of this if today sees direct losses.

USDJPY… the decline probably fueled by the decline in EURJPY. It has forced me to review the weekly and daily structures. This drop does seem rather contrary to the basic expectation of Dollar strength so I can’t see this negative correlation continuing but the question is from where it will bounce. To be honest I see an argument for yesterday’s low to be the final low – or perhaps a few pips lower… There is even a weekly bullish divergence now to support the daily one… All that’s missing now are the shorter term ones. Having said that, given the sharpness of the decline and the common fuzziness of the type of structure I am observing it will be best to remain careful but with the knowledge that this decline is unlikely to extend strongly now.

USDCHF… what the… Well, clearly what happened was not on my list of likely scenarios. In many ways I’d like it to carry on and reach that 1.0140 target but that seems a tough call. Let’s just say that in a perfect world it should but I wouldn’t want to put money behind it at this point. This one is best left to judge reactions.

Both AUDUSD and USDCAD appear to require deeper corrections and it’s this that keeps me erring in favor of the corrections in the “normal” currencies continuing.

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. (+115 pips)

Good luck.
Ian Copsey

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

Tuesday, August 24, 2010

The Dollar is tipping over the edge

Well, I think we have our answer… USDCHF has risen above 1.0402 and while there is a grey small area which would allow a deep retracement the breakdown of Dollar bearish divergences in EURUSD and GBPUSD is rather ominous. In that case I have to assume that we’re already on the way higher for the Dollar. Even the situation in EURJPY makes it very evident that a solid decline is underway and overall I feel the momentum of the move will likely accelerate.

I am rather disappointed that USDCHF didn’t reach my favored target, but it has done enough – just – on the downside to fulfill a weekly target and as long as we get over the next 20 points or so this should now begin a rally for the coming 2 months or so… Therefore I feel we should be looking to buy into Dollar retracements in order to take advantage of what should be some solid moves now. Of course some pullbacks will be slightly deeper and I’ll attempt to identify these in the individual analyses.

USDJPY remains stubbornly locked in its tight range, the market seemingly polarized between a break of 84.72 and 86.37. Even if it does break lower, I’m really not that sure it’ll extend too far. This still has a strong bullish divergence and while they can break I don’t think this is the time. Therefore, even if this does move lower I feel the general Dollar bullishness will drag it back higher. To me the stronger structure should take it directly higher but at this point there’s no sense in taking a wager when short term momentum is so subdued.

AUDUSD still looks bearish and does look very vulnerable to a stronger decline, much in line with the general US Dollar outlook. USDCAD still seems to have a little more to go on the upside but with the hint of a bearish divergence forming in the 4-hour chart there is reason to take care and possibly look for a peak if the rally remains slow.

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. (+40 pips)

Good luck.
Ian Copsey

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

Monday, August 23, 2010

The threat of Dollar gains has increased considerably…

Friday partly went my way but mostly against although the alternate downside targets in EURUSD and GBPUSD held quite well. The rally in USDJPY was encouraging and the pullback to just below the 1.0402 corrective target in USDCHF was also as expected. However, it is the loss of 108.50 EURJPY that opens a can of juicy worms that raises the risk of a robust decline. Indeed, once this continues I feel it’s going to be really quite a shocker.

These may sound simple statements but there does remain a significant conflict. A bearish EURJPY implies that EURUSD will most probably be the driving force (as opposed to USDJPY.) However, the bearish structure in USDCHF has been almost point perfect and does imply losses itself. Of course it’s not impossible for both to decline if there is some catalyst. We have seen it before but it’s not something I like to rely upon.

Therefore, something has to break somewhere or there has to be some complicated correction to Friday’s Dollar gains to allow USDCHF to make its final descent to what should be a much larger reversal higher. The added complication is that it has already done the minimum to satisfy a weekly triangle target but I can’t see that the current decline has been completed.

Thus, today we have an element of uncertainty which needs to be clarified. If USDCHF breaks cleanly above Friday’s high and the 1.0405 area then just follow the Dollar gains across the board… Until then be open to come complicated consolidation that should see EURUSD and GBPUSD recover in some manner. Also keep in mind EURJPY – any break below Friday’s low looks like opening a pretty deep hole…

Just to cover USDJPY, it looks to me as if it has staved off any further losses with the 84.72-88 lows unlikely to be broken for now. However, I’m not convinced it’s going to mean any immediate strong gains as there is an odd-on chance that it will continue to consolidate in a sideways range, perhaps a reflection of the expected losses in the cross.

AUDUSD gapped lower on open this morning but the recovery has been deep enough to generate risk of a sideways consolidation before it, too, extends the downside. This may also be a possible indication of the Dollar going through a general consolidation to allow USDCHF to decline.

USDCAD has returned to normality – but “normality” here actually implies confusion…

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. (+90 pips)

Have a profitable week.
Ian Copsey

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

Friday, August 20, 2010

The end of this correction is in sight but may well spring a few surprises on the way…

Yesterday was a messy, messy day but one move stood out above all others – the drop to 1.0257 USDCHF. The disappointment was that it retraced a little deeper than expected before the drop. However, what it does do is provide an excellent marker for what happens next…

In general across the Europeans I anticipate an erratic start to the day. In particular in EURUSD and GBPUSD there seems to be prospect for some range trading which should allow USDCHF to retrace a little higher to complete its correction from the 1.0257 low. This should then be followed by some Dollar weakness across the Europeans to deepen the overall correction to the moves from the Dollar lows.

The key for where they will stall has a strong chance of being identified by the anticipated low I have been highlighting for some while. I will highlight the sort of areas we may expect in EURUSD and GBPUSD within the individual analyses.

Be sure to spot this as I suspect this will be the lowest we see the Dollar for around a couple of months. EURUSD is destined for new lows while GBPUSD and USDCHF should not break their (Dollar) highs seen this year…

Now, the more troublesome currency pair is USDJPY… The 85.90-98 resistance was highlighted yesterday as part of a bullish structure but the correction bit too deep to drop to just above the 84.72 low. What next? My preference is for it to rally. The reasoning comes from EURJPY.

I am bearish overall on the cross and this should flirt with the 100 area – maybe just below. However, that is my limit for now. Considering I am looking for a new low below 1.1879 EURUSD it should imply that USDJPY will recover. The structure I am looking in the weekly chart appears to be a descending triangle and ideally it should not significantly break the 84.82 low. The 84.72 level was perfect and my preference is for it to hold. In the short term EURJPY doesn’t appear to be declining in a trending mode and I still have a preference for a recycling back to the 111.10-27 area. I shall highlight the EURJPY supports in the report.

Well, it’s a tight call… best take care still…

AUDUSD is making constructive bearish structures but still has potential for some short term whips. USDCAD bounced almost perfectly but appears close to an initial peak so expect a pullback.

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. (+265 pips)

Have a great weekend.
Ian Copsey

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

Thursday, August 19, 2010

There are still two ways to view the current impasse…

Yesterday was pretty much a mess and leaves the situation hanging between two scenarios. I can accept some individual currency pair moves but the problem I continue to have is the balance between the implication for the EURJPY cross and USDCHF…

The problem lies in the extremely limited pullback in EURUSD which has potential to just be part of the decline from 1.3227. However, I feel that the downside would still be relatively limited and then imply a much deeper correction higher… I turn this would cause USDCHF to break above yesterday’s 1.0452 high to imply stronger gains but I’m not convinced these would be limited as implied in EURUSD. The same can be said for GBPUSD which has had a stunted correction in what appears to be a complex correction from the original 1.5534 low…

So if I consider the possibility that the drop from yesterday’s high is just a deep correction lower in EURUSD then it does suit USDCHF but would risk deeper losses in USDJPY which I still find hard. The move I had expected in EURJPY didn’t materialize and this may well be a key factor. I could still accept some losses and actually prefer this to move below the 109.05 low, but again I feel this is more likely to be a complex correction with an ultimate retest of 111.10 being the most probable outcome before it too descends into the abyss.

It’s this anticipated decline which I feel will be quite strong that remains the core issue. I am overall bearish in EURUSD and feel this is the currency pair that will drive the decline. I would much rather see a deeper recovery in EURUSD that would allow the cross to recycle back to 111.10 and then see EURUSD collapse but this will need USDJPY to remain suspended in motion which I find tough…

So the advice I outlined yesterday in terms of the 1.0452 high in USDCHF together with the situation in EURJPY are the two key potential catalysts for the next move. Bear in mind these two and the relative breaks in the individual currency pairs…

AUDUSD actually looks more bearish today but we have to extend losses below the low seen already today and until that occurs then the correction can recycle. USDCAD on the other hand looks like making a key low today so watch out for that one…

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. (+100 pips)

Good luck.
Ian Copsey

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

Wednesday, August 18, 2010

There are a few signs of a cracking at the edges

Dollar losses continued yesterday but it was certainly not a one-way affair with GBPUSD actually looking quite weak. So limited were the Dollar losses that it allows some risk of a quick blip to new highs. However, the core influence for me, as described yesterday, is EURJPY. This has taken the course I suspected yesterday in rallying back higher in what appears to be a recycling of the correction to the 111.10 high. I still view this as the probable catalyst for the next larger move for once this current move higher is exhausted the implication is for quite a drop and I still view EURUSD as the probable main driver of the decline.

Here comes the rub… If EURUSD drops directly from here it does open an ambiguous structure (and the same is true of GBPUSD.) From one perspective it could lead to losses to new lows in both currency pairs which should be followed by a deeper correction. The other perspective would imply that we have seen the full correction from the 1.2732 and 1.5535 lows and the larger downtrend should therefore resume.

Which is to be? Well, we can bring in potential evidence from USDCHF. I had been desperately hoping for a stronger decline but stated the 1.0449 level was the key resistance. Indeed, just about here the rally stalled. However, the reaction from there can hardly be described as robust…

Therefore I look to a combination of USDCHF and EURJPY to deliver the signals that should highlight the next move. Ideally I’d still like EURUSD and GBPUSD to rally again as the correction from their respective lows has been very, very shallow. However, any break of 1.0449 (perhaps allowing a small break) and a cap around the 111.10 EURJPY area would force me to accept direct Dollar gains…

During this process I still feel the most likely course for USDJPY is directly higher but I don’t expect such a move to be particularly aggressive.

In all this AUDUSD and USDCAD didn’t react as I had expected. For the former I feel much depends on the larger US$ move – I still can’t get too bullish here for now but will react to moves as they develop. For the latter I feel the downside may be limited but there is a duality in the larger picture which could imply that the 1.0493 high may have been a strategic high. Until this situation is clarified 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. (+55 pips)

Good luck.
Ian Copsey

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

Tuesday, August 17, 2010

The Dollar bearish correction should extend today

I saw two potential stalling areas yesterday and the first area seems to have triggered the reversal. Overall this does seem set to extend further today with the first half of the day likely to see a mild pullback and consolidation. However, there are a few issues to watch out for that could cause problems so it will be best to be aware of these.

Basically, both EURUSD and GBPUSD stalled at the first downside hurdle and generated a corrective move higher. In some ways these were complete corrective patterns in their own right that could allow the Dollar rally to resume. However, I have strong doubts over that possibility. One of the things that drives my opinion is the drop in USDCHF. It hasn’t breach the 1.0331 low yet but momentum remains bearish and as mentioned yesterday I have a feeling this may well extend to the target area I had been considering for the past few weeks.

This event should also lead to the upward corrections in EURUSD and GBPUSD. I do not think these will get particularly close to their highs – just closer than we are at present – and with luck we may find USDCHF finding its downside target at the same time as the other two find their corrective highs.

Next, USDJPY dropped quite sharply and is threatening to retest the 84.72 low. Again, it’s not my favored view to see new lows – at least below 84.65 which may have a minor chance of occurring though again I have serious doubts. However, there is a complication here in the EURJPY cross. I am bearish for the latter overall and saw the 109.15 low as a possible internal extension. However, a drop at this point will clearly require either (or both) EURUSD or USDJPY to continue their decline. Given that decline in the cross was just a bit choppy we may have to allow for minor new lows but a recycling back to the 110.10 high is then possible. If anything, this is my favored view as it will allow EURUSD to remain bullish and USDJPY to remain in a range – but above 84.72.

The Aussie looks less bullish but should see a marginal new high. From there I suspect it will lapse into a sideways trading range. USDCAD… just getting a bit suspicious here and feel that the upside is limited so take care…

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. (+40 pips)

Good luck.
Ian Copsey

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

Monday, August 16, 2010

The Dollar’s strength looks like stalling later today

The last report before the break saw the Dollar weakness extend further than I had been expecting which caused a flurry of uncertainty only to see the reversal which I had been expecting then develop. The Dollar gains seen last week have been uneven across the currency pairs with the Euro being the strongest loser which, if the original expectations I had remain valid, doesn’t really surprise as it’s only the Euro that I would expect to make new lows against the Dollar.

Today should begin with a mild follow-through of Dollar gains but I’m not sure this will set the trend for the week. A correction is due, potentially quite deep and could last anywhere between 2-4 days depending on how it develops. However, I do see a little divergence in outlook here as the rally in USDCHF has not been particularly robust. It does resurrect the original target I had been contemplating so be aware of the potential for a new low in this pair. I’m a little mixed on this front when considering GBPUSD but my feeling is that we probably completed the rally at 1.5997…

Next, USDJPY stalled perfectly in the 84.65-82 support area I had been highlighting and this also contributes to the general expectation of a stronger Dollar. I don’t expect this to be broken – or if it does it would suggest a much earlier resumption of the multi-year Dollar bearish trend. However, the risk here is for the recent erratic and choppy price development that has been the pattern for the past (almost) two years is most likely to remain. However, this does appear to be the last leg – as I view the Dollar’s anticipated gains against the Europeans over the next 2-3 months – and therefore once complete should provoke a much stronger bearish Dollar thereafter.

Indeed, USDJPY gains could lag overall against the Europeans which should keep EURJPY on a general downward path. We should remain aware, though, that this should continue to be a choppy decline but a break of the 107.31 low does appear to be a probable outcome this week – or if it gets embroiled in a tight consolidation – then next week.

I am slightly mixed with AUDUSD and while there should be losses over the day I don’t foresee these being too deep with a correction higher likely. USDCAD has close resistance that needs to be watched which will provide the trigger for the next move but we’ll need to see what it does first.

Thus, on the day a general overview would be for the Dollar strength to remain in place for the first half of the day at least but I think a larger pullback should begin by the end of the day.

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

Have a profitable week.
Ian Copsey

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

Friday, August 6, 2010

I still think the evidence supports Dollar gains but tinged with some uncertainty

Please note that The Daily Forecaster will next be published on the 16th August


Since this will be the last update until the 16th August I shall attempt to provide general guidance in where I see the major risks. Very clearly I didn’t really get my way yesterday, the Dollar recovery stalling and providing a degree of near-term uncertainty. With the non farm payrolls being announced in early NY trading it seems quite probable that this will remain the status quo until then.

When I wrote the daily review for the trader package that considers the implications from indicators it was just about universally neutral. Daily (Dollar) bullish divergences remain in 3 of the 4 majors with just the exception of GBPUSD but this could be considered to be a possible spike high. The intraday momentum signals have extinguished themselves and thus await a new thrust.

When I came to the process of wave measurement and structure I could see a certain level of ambiguity but overall slightly more evidence of a Dollar bullish structure. This does still remain my preference and assuming tonight and next week generates further gains I feel this should see a moderately solid follow-through but we’re still at a stage where even after the next rally there will be risk of a pullback and one that could conceivably be quite deep. So unless there is some catalyst to limit the correction and spark a round of gains we shall still have to play a cautious game for the coming few days. It may take until the end of next week to see a stronger directional rally.

Now, to cover the alternative… If 1.3300 EURUSD, 1.0140-1.0255 USDCHF, 1.5967 & 1.6013 GBPUSD and 84.65 USDJPY all break… to be honest it will look to me as if we are already entering the final major cyclic decline which will end in H2 2012 (approx.) To be honest, at this stage, it is going to be difficult to provide much structure to work with as there appears to be a good deal of imbalance to the individual structures of the 4 majors. (This is one reason I still favor the downside.)

I guess the 79.70 low is an easy target to identify with the 0.9644 low in USDCHF and 1.7041 high in GBPUSD all coming to mind. However, we’re a long way away from the 1.5143 high in EURUSD. There is the 1.3691 corrective high and probably that would be the first to observe. Above that high there isn’t too much to really provide a focus.

For the moment, until proven wrong, I’ll stick with the view that the Dollar still has more chance of strength…

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. (+60 pips)

Good luck for the coming week…
Ian Copsey

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

Thursday, August 5, 2010

Yesterday’s moves were encouraging. Follow-through today would add some icing on the cake…

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


Despite all the rather mixed signals yesterday provided the push up in the Dollar needed to retain the prospect of a major high having been seen. The dip lower by USDJPY into its target zone helped by adding one more of the 4 majors to reach target while the completed double bottom in USDCHF provided conformation of gains.

So is that it? I think maybe it is – well all apart from a possible new low in USDJPY. However, I can’t say it is a done deal, done and dusted, cut & dried, in the pan quite yet. In terms of the larger picture we haven’t yet revisited key retracement areas or even broken Dollar swing highs so there’s some work still to be done. However, the initial stages do look constructive and this is what I’ll be concentrating on today to ensure that we are seeing the correct structural development that is in line with the initial stages of the reversal.

Just taking a step back and on the assumption we have seen a major turn I should outline that I will be expecting a new low in EURUSD but no breach of the weekly Dollar highs at 1.1730 USDCHF, 1.4231 GBPUSD and 94.98 USDJPY. I mention this as it does appear to be a mainly Euro inspired move and therefore it should weaken against the other three as we move forward over what should be a 2-4 month move.

Just to repeat a comment above I think we should be aware today that, in spite of USDJPY dipping into the targeted zone, I am not convinced at this point that we have seen the final low and that may well come today. The only confusion is that EURJPY hasn’t laid down and died yet and is threatening a minor new high above the 114.18 corrective high but I don’t see it breaching the 114.73 high.

AUDUSD was hardly impacted by the moves elsewhere and closed towards its highs. I’m slightly cautious about this but the upside does still seem to have upside room. Again, this tends to fit in with my perception that the coming U.S. Dollar strength appears more Euro based and dragging USDJPY with it, the latter quite happily no doubt with the carry trade quite possibly driving.

USDCAD also has room for one more dip before that reverses higher…

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. (+140 pips)

Good luck
Ian Copsey

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

Wednesday, August 4, 2010

It’s now… or never…

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


The market so often strives to confuse... GBPUSD rallied and stalled just 2 points below the upper edge of the 1.5956-69 resistance target. EURUSD played games and edged above the 1.3234-45 target to stall at 1.3261 – ok I can take this. USDJPY made good downside progress to stall at 85.66 but USDCHF stubbornly refused to lie down and die.

Momentum-wise GBPUSD has hourly & 4-hour bearish divergences – but weekly & daily have no reversal signals. EURUSD is hanging on by the fingernails of its Brussels bureaucrats with a daily and 4-hour bearish divergence – just – an hourly divergence that hasn’t really forced any real pullback. USDCHF has a strong daily bullish divergence but the shorter times frames are really mixed. USDJPY has a daily bullish divergence and every chance that intraday will confirm this too.

So where does this leave us? The reversal signals are not the strongest but are there. We have seen GBPUSD extend its rally to extreme projections (according to the structure I have…) USDCHF hasn’t met the ideal target but could reverse while EURUSD is really pushing the upper levels of what I had been considering the daily retracement limits…

As far as I can see any further extensions in the Dollar decline must be limited otherwise the entire mass of the momentum will trigger a stronger follow-through that will destroy the fragile Dollar bullish divergences. What does this normally do? Well, it generally causes mayhem through an acceleration of the trend…

As one subscriber reminded me (as I generally don’t bother to find out) there are a few economic releases due over the rest of this week and a Fed meeting next. While I don’t take any of these into consideration in my analysis I do obviously acknowledge that these releases can generate bedlam if the numbers are unexpected. Coupled with the fact that I am seeing what appears to be a defining moment technically I do think we have to tread a little carefully.

What I do seem to perceive is that even if we are to see the Dollar downtrend continue there is a chance we shall see a pullback first, either directly or from minor new lows. It will no doubt add to the uncertainty over what we are seeing and therefore it will require greater care and attention from this point onwards…

Today’s free analysis is for EURUSD and can be found on http://www.fx-forecaster.com/DailyForecast.html along with yesterday’s Trader Package Review & Trade Set up report. (+0 pips)

Good luck
Ian Copsey

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

Tuesday, August 3, 2010

Still just a bit further to go…

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


This final part of the decline has become discombobulated… The elaborate description of how the four majors should develop was torn apart by what actually happened. GBPUSD led the way in a rampant, runaway rally while the others stood and watched. EURUSD finally made a break to try and catch up but USDCHF and USDJPY really found it hard to work out what all the fuss was about…

However, the end does appear to have come closer to the near horizon so it should be more a matter of time and patience. EURUSD in particular seems to be just one more leg higher away from my long held target but USDCHF, while the deeper targets are still valid, does raise some question over its enthusiasm and indeed ability to get much beyond the higher target. If I have any questions to ask of price action then it is in the intraday momentum picture which does seem to have been stretched to the point where Dollar bullish divergences are under pressure…

So while I am still overall satisfied with the progress there are still one or two areas which I still feel require some due care & attention. Just as GBPUSD has extended its rally far beyond expectations there does also seem to be risk of USDCHF and USDJPY falling short of targets. If we approach them without good Dollar bullish divergences it would add to the concern.

We should start the day with the usual caution in Asian trading and probably see the pullbacks from yesterday’s Dollar lows deepening just slightly. Then we need observe the second half of the day and concentrate on the potential move to targets. Ideally we should see the turns today with the only risk being a longer sideways consolidation – though still quite shallow.

One more concern is AUDUSD which appears to be pointing to a deeper upside target, but even here an initial correction appears due. However, USDAD seems in line with the approach to its target.

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. (+55 pips)

Good luck
Ian Copsey

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

Monday, August 2, 2010

Emphasis remains on identifying the Dollar low…

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


I can’t say Friday developed exactly as expected but overall progress was made towards the long anticipated Dollar low. The corrections in GBPUSD and EURUSD were slightly deeper than expected but still retain their bullish trends. In particular GBPUSD saw a break of the expanding triangle line I had drawn but then whipped back up to new highs. While it wasn’t on my list of alternatives, now that it has occurred it generates an alternative route which appears to indicate a higher target.

Quite obviously, from this point onwards we have to be aware of the growing risk of a reversal. The issue I see facing us is more the varied progress that needs to be made to reach targets. I can see risk of some early consolidation in GBPUSD and USDJPY but the Continental Europeans appear to require a more direct approach as their respective targets a little more distant. From that perspective I feel we’re going to have to turn off the requirement for correlation to a certain extent today and be prepared for some movement in the crosses.

While it is difficult to judge the timing, and assuming I am right about the direct move to targets, then I would imagine this is going to take the majority of today with some risk of extending into early tomorrow. I only have one concern and that is a potential second deeper correction before the final descent develops. From what I can see this is a more unlikely development but one just to tuck into the back of your minds.

If there is anything I can add to provide a stronger all-round picture it is that early trading in EURJPY does look bullish as a correction back higher does look likely after last week’s initial decline. There is no change to my view that the cross is on a larger decline now, but it does tend to correlate with my impression that USDJPY may well initially lag behind the Continental Europeans…

AUDUSD does look like making gains also but I’m not sure these are going to be extensive. USDCAD does appear to have voted to retest the 1.0138 low…

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. (+50 pips)

Have a profitable week
Ian Copsey

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