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HARMONIC ELLIOTT WAVE

Thursday, September 30, 2010

I think that’s just about it… We should see the Dollar correct higher…

I was rather surprised with the shallow pullback yesterday but the expected Dollar losses worked perfectly in EURUSD and USDJPY though disappointed in USDCHF. The interesting point about USDCHF is that the 0.9731 support I had been identifying for a while actually held and is a perfectly good alternative. With EURUSD reaching target and AUDUSD also the pointers all round are suggesting that the slightly larger correction should now begin.

It looks like starting out in a fairly conservative way and may just generate what looks like range trading but I feel there should be a stronger reaction by late in the day. By tomorrow I reckon we’ll be in the thick of the move. This tends to suggest a fairly choppy type of correction that may well look pretty complicated for a while but by early-mid next week I feel we’ll complete the move and head lower by the end of next week.

There are possible a couple of exceptions to this. First of all it looks like GBPUSD may be in the middle of a sideways consolidation. I’m just a bit mixed on how long this can last and whether it can synchronize the completion of the correction with those in EUR, CHF & AUD. It’ll be important to understand the type of action that could develop to try and coordinate this against the other Europeans – especially so as it seems like USDCHF has completed one leg of the correction already.

The other exception may well be USDJPY. The bounce from 83.49 was just 2 pips above expectations but does seem to require another return higher before the downside can follow-through. This would seem to be a little earlier that the Europeans but maybe that’s ok as it does seem to be in a slightly different position than the others. I have just one nagging doubt in the back of my head that maybe it will morph into a larger sideways consolidation. I’ll outline the break levels in the analysis.

Another uncertainty is EURJPY. It held yesterday’s key support to push back to its highs and I fancy this a little higher but may well fall short of the 114.73 high. The momentum situation here is looking really stretched with bearish divergences threatening. It’s certainly one that still requires a great deal of vigilance.

Finally, USDCAD did turn into a sideways consolidation. It has just one final dip before the expected follow-through higher. Once this rally stalls the larger risk does appear to be for a break out from the 6-month triangle which should make for a significant move.

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


Good luck.
Ian Copsey

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Wednesday, September 29, 2010

And one more low again … then we should see the correction begin…

Yesterday wasn’t too bad. Apart from USDJPY (and therefore EURJPY) and GBPUSD the moves I had been looking for developed quite well. Indeed, the dip in the Dollar came pretty much on cue and reached levels around the targets I outlined. However, from what I can see the decline still hasn’t quite finished so we should expect more of the same today.

That “same” should therefore imply a pullback over the first half of the day and a drop by the second half to reach even lower Dollar targets by the end of the day or by early tomorrow. I’ll stick with the same song – that once we have seen this decline there should be a deeper correction. Yes, just a correction. This Dollar still has some way to go on the downside yet. However, the period of the correction should be longer than we’ve seen of late.

Let me just reiterate. There are major multi-year bearish Dollar cycles that should basically imply losses fro the coming 2 years. Once the anticipated correction has finished I would not be surprised to see EURUSD top 1.40 before we get a more sustainable correction. Even that is unlikely to be the end of the rally from 1.1879…

Just concentrating back on today again, GBPUSD was another currency pair that went a little weird on me. The high appears to have been an extremely unusual projection ratio but does slot in well with the rest of the structure and this also should either see sideways consolidation or a quick dip before another rally that may well top the 1.5997 high.

USDJPY chose the downside against my recommendation and screwed up EURJPY in the process. I can accept the USDJPY decline as it was always a bit of a coin toss. However, to keep within the bullish expectation for EURJPY implies an amazingly complicated structure. I can’t see that it’s completed its rally but I do feel there is more to come to retest the daily 114.73 corrective high and probably a bit more. At that point I’ll want to look at this one just in case it found the larger low I had been looking for at 105.42…

AUDUSD – much the same – still needs another high before a deeper correction. I have to say this wave structure looks particularly bullish too… The 0.9849 high may not hold for too long… USDCAD looks like it’s going to move sideways for today.

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. (+50 pips)

Good luck.
Ian Copsey

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Tuesday, September 28, 2010

A larger correction is still due but perhaps still odds favor one more push lower first…

Well, I wrote yesterday’s report, sat back to watch … and was promptly sent to sleep… Seriously, what a waste of a day. At least the world has found a cure for insomnia.

In many ways it made today’s analysis a little easier since none of the longer term projections have really changed. It’ll probably mean that I can only repeat yesterday’s comments for many of the currency pairs as this still remains my view. A larger correction does appear to be looming and that is the basic message. So the remaining issue is whether we’ll see once more Dollar low or whether that correction will develop directly.

I’m sticking with the view offered yesterday. That is, I still see risk of one more push lower for the Dollar before that deeper correction. However, just make sure that you note the break levels that will negate the new low…

If there was any currency pair that I found that caused problems then it is EURJPY. The way I was looking at it really needed a push higher yesterday and the fact this didn’t occur makes it a lot more difficult to fit into the structure I have been considering. This puts me into two minds over the next move. They say that two minds are better than one but it still doesn’t really help me feel any better.

If I have any preferences then it remains higher, mainly because I sense that USDJPY should recover. There is still just a small chance of a minor new low but the impression I get is more bullish. Still, best wait for breaks here but those levels are really not that far off.

AUDUSD seems to match the same patterns as the Europeans – that is, still one more high before a correction. Cautiously USDCAD looks to rally within what I feel will be the last leg of the consolidation since the 23rd April 0.9929 low…

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. (+10 pips)

Good luck.
Ian Copsey

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Monday, September 27, 2010

There’s still some upside in EURUSD and probably GBPUSD… but a correction is due soon…

Apart from screwing up the heading on Friday calling for Dollar strength by the end of the day (and I hope that faux-pas was obvious from the text – as I was thinking of EURUSD) the day developed relatively well. I can’t see that we’ve reached the high in EURUSD but USDCHF may well have seen its low for now. Dollar bearish momentum is beginning to slow and while I remain overall bearish I don’t think it will be too long before we see a slightly deeper correction.

The day looks like starting with a pullback but should finish with the Dollar testing new lows against the Euro and probably Pound too. On USDCHF I am a little more mixed. There are signs that it may have found a temporary low and has already begun its correction. I’m open minded on this but if we do see a new low in USDCHF then it’ll only be marginal.

A bigger confusion comes in the form of USDJPY… Another seemingly BOJ inspired rally but which didn’t reach anywhere close to the 85.92 high and then dropped straight back down to new lows… I am left sitting on the fence between a second move higher back to Friday’s 85.38 high – maybe a touch more – and then lower – and a direct decline back to around the 82.86 low. The moves have been too sharp to be 100% certain of the structure and this leaves the picture wide open. However, I’ll try and highlight the break areas that will indicate which alternative will develop.

However, if I am correct on EURUSD and my outlook on EURJPY then a rising cross is more likely going to require USDJPY to ably assist EURUSD as a move back to around the 114.73 high does appear to be implied. I would actually expect a limited follow-through above also. At that point I feel the cross should fall back lower again.

It’s really hard being bearish AUDUSD as Friday brought a much stronger than expected performance. However, I feel there is still some key resistance levels not too far above current levels that tends to blend in with the expectations for the Europeans.

USDCAD… very balanced. I still have a perverse preference for the upside. In the larger picture I still feel that a breakout from the long 6-month consolidation is due imminently but would prefer for one more correction higher before this develops. However, just be aware that when the pattern breaks lower the move could be quite persistent.

Today’s free analysis is for USDCHF and can be found on http://www.fx-forecaster.com/DailyForecast.html along with Friday's Trader Package Review & Trade Set up report. (+95 pips)

Have a profitable week.
Ian Copsey

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Friday, September 24, 2010

Today may see a slow start but I fancy Dollar strength by end of day

Yesterday provided mixed reactions… The Dollar lost out against USDCHF and GBPUSD but gained against the Euro… I have a feeling we’ll see more mixed reactions today as well although with a more uniform Dollar downside but this may well take until the second half of the day to develop.

The move lower in EURUSD doesn’t look complete and I feel even USDCHF could correct just a little higher too though not by too much. The corrective target in EURUSD isn’t much lower than yesterday’s low and basically I feel the first half of the day will be spent allowing this mild extension to develop. This should then trigger the next leg lower in the Dollar with EURUSD having to move further to reach its target compared to USDCHF. Thus expect some movement in the cross.

What I am less certain of is GBPUSD. Yesterday’s rally was far more erratic than expected and almost to the point where I could even conceive that yesterday’s high will not be broken. It’s rather touch and go. Even if it does make a new high I don’t expect it to be by too much. The difference between GBP and the continental couple is that the rally in GBPUSD actually looks more like part of a correction that would imply a return to the 1.5503 low again… This is not necessarily a mismatch between the three as once EURUSD and USDCHF have extended their trending moves there will be risk of a deeper correction. The issue will be how they all coordinate their respective moves since EURUSD needs to move more rapidly than USDCHF and GBPUSD really appears to have little elbow room…

Just as a caveat, if the initial EURUSD decline breaks its support the implication is actually very bearish so be aware of that threat…

EURJPY is balanced and we’ll have to work with breaks. I am still working on the basic assumption that we’ll see gains extend back to 114.73 and maybe a touch above. The question is whether it will make this rally directly or after a recycling back to the 111.46 low… Assuming EURUSD rallies today this does seem to suggest that the upside will be more at risk and does seemed to be backed by a bullish divergence in USDJPY also.

AUDUSD – dropped as expected and I feel there’s more to go. However, be prepared for a deeper pullback higher before that next decline develops. As mentioned above, assuming I am correct with the anticipated follow-through in EURUSD and USDCHF then we’ll be talking about the Dollar correcting higher all-round. Watching individual targets and timing look important today.

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. (+75 pips)

Have a great weekend.
Ian Copsey

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Thursday, September 23, 2010

There is risk of Dollar losses extending today but less aggressively

I guess the answer to yesterday’s question of whether the Dollar downside could extend aggressively was positively answered… So that’s it. The next two years should basically be lower and probably seeing two downward legs separated by a correction. Just looking at the projections of the first rally from 1.1879EURUSD it certainly looks as if this first leg higher can reach close to the 1.6036 high while in USDCHF the 0.9644 historic low is already not a million points away…

Well, that’s getting ahead of ourselves and as normal there will be glitches and complications along the way. Focusing on yesterday’s developments I feel we are still mid-wave and today should see further Dollar losses but not quite so aggressively. At that point I feel there will be more risk of deeper pullbacks towards the next intermediate targets.

Funnily enough, after leading the way for so long in the initial decline GBPUSD has tended to lag behind the Euro. As long as it remains above yesterday’s high by a reasonable margin this should see follow-through higher today as well else extend the sideways consolidation for a longer period.

USDJPY dropped below the key 84.70 support and destroys the immediate bullishness but leaves an air on uncertainty. The sharpness of the recovery from the 82.86 low has hidden the structure so it’s just a bit difficult to establish whether the recovery was a full correction or only part of it. Similar to the Europeans the long term cycles are bearish for the coming 2 years but at this point, while I still acknowledge a potential decline in EURJPY (although there is an argument for it to have found its final low at 105.42) I feel the decline in USDJPY will lag the Europeans.

In the near term I still see another leg higher for EURJPY though yesterday’s high at 113.37 does bring with it the risk of the correction recycling back to 111.46. Therefore I feel we’ll have to remain balanced on USDJPY and prepared to work with breaks.

AUDUSD seems to be finding some sort of barrier as after leading the way against the US Dollar failed to take advantage of the general Dollar bearishness yesterday. While I see a small risk of marginal new highs my preference is more for a correction lower at this time but this does remain mid-rally overall.

USDCAD has become a little whippy. It’s due to break from the massive weekly consolidation at any time. I favor it to be 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. (+80 pips)

Good luck.
Ian Copsey

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Wednesday, September 22, 2010

Are we on the verge of seeing the Dollar confirming extensive losses?

It’s certainly possible… not quite a certainty but the collapse in the Dollar late in the day has come with quite firm momentum and does threaten to follow-through. There are some potentially positive structures developing also which, if they follow-through, would imply a repeat of the late collapse through today and easily surpass the 1.3333 EURUSD high and 0.9931 USDCHF low.

Even at this point I have all but abandoned any thoughts of new lows in the Euro and could only conceive any repeat of the decline that came from 1.3333 as being the correction recycling. I won’t rule out that chance of a recycling yet though I have to say that it does look less likely all the time.

Therefore, be prepared to hang on to any short Dollar positions but until the resumption of the downtrend is finally confirmed do run a trailing stop.

Yesterday was a day we also saw USDJPY finally break out from its range and is now approaching key support. Will the BOJ continue its support when EURJPY is rising or will it find it hard to justify intervention because of the relative JPY weakness against Europe? I feel the break level is quite clear and this should provide that clue. I will highlight the critical support level in the individual analysis.

What I do note however is that EURJPY still looks bullish. It may occur directly or may just recycle the correction. Certainly the correction was enough but what I have noted is that the normal projections would imply a target a little way above the 114.73 high. This tends to suggest the USDJPY support will hold…

AUDUSD pushed higher also and through my favored 0.9542 resistance target. I am slightly more concerned here as, although hourly & 4-hour momentum still looks bullish, we do still appear to be approaching key resistance levels that would provoke a reasonably deep correction. Watch these target areas closely.

USDCAD has retested the 1.0215 level for a third time and I’m a bit split here. I don’t see the recovery to 1.0349 as being deep enough for this leg of the correction. It could well be that we’ll get a test of the long standing downside target but I’m not that keen on seeing follow-through. There does still appear to be need of a slightly deeper retracement higher before the final break from the long term consolidation.

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. (+155 pips)

Good luck.
Ian Copsey

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Tuesday, September 21, 2010

Apart from the anticipated correction yesterday wasn’t too convincing…

At least we saw the corrections higher in EURUSD and GBPUSD stall in the right areas. The Pound then saw a more convincing decline but left the Euro a little behind. It was partly positive for my preferred Dollar bullish view but didn’t really do enough to really confirm the strength. I’m not even convinced that we’ll see any confirmation today as GBPUSD appears to require a pullback higher at the very least while EURUSD is threatening further sideways consolidation, possibly even with a minor new low.

The idea of a rather dull day, or part of, appears to be echoed by the EURJPY cross. I remain bullish on this but equally I feel the correction lower needs to deepen a little further before the next leg higher. The next question is whether this will be driven by EURUSD or USDJPY… or perhaps a little of both. I remain with the view that overall USDJPY does need another new high and quite a solid one before this can retrace lower. However, the rather abnormally extended narrow sideways consolidation has begun to conceal the true internal structure.

Therefore, there are still some potentially tricky issues to cover before this all unravels. My ideal is for EURUSD to fuel the dip in EURJPY but then see a pullback. A combination then of both EURUSD correcting higher and USDJPY extending gains would begin to satisfy the anticipated follow-through higher in the cross…

Thus, I’ll try and outline the key areas in each currency pair and with the general conditions outlines above we’re going to have to work through this period of uncertainty.

AUDUSD has seen gains extend but interestingly this is approaching a key resistance I have been highlighting for the past few days. There is a good chance this target will be seen today and should provoke quite a solid correction. Bearish divergences are building in the hourly & 4-hour charts.

USDCAD remain mixed which is some ways is not a big surprise as the 6 month sideways consolidation remains in place. I do feel it will be completed relatively soon – and possibly as soon as next week. Once this does end the next move should have potential to be quite aggressive…

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. (+50 pips)

Good luck.
Ian Copsey

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Monday, September 20, 2010

The end of the correction?

Friday provided a mish-mash of results although in all three Europeans the final highs came in exactly at one of my highlighted resistances – generally the fallbacks if stronger follow-through was seen. Even USDJPY held the closer resistance but failed to react as strongly as the Europeans…

In particular the peaks in EURUSD and GBPUSD do provide an argument for a Dollar low now in place. Certainly the declines from those two peaks have come with more “impulsive” ratios that indicate a further low once the correction is complete. Quite where this additional low ends and the reaction from there should dictate whether we’re going to see the larger Dollar correction higher will be maintained or, of course, the opposite.

My own preference at this stage is for the Dollar correction to extend higher. I’d actually prefer this for USDCHF to resume the normal correlation with the other Europeans. That has yet to be proven and recently has not really been something on which to rely so we’ll have to take care until there are greater indications but the view for a bullish Dollar overall is the preferred scenario for now. In the long, longer term I remain bearish Dollars so we cannot forget this risk but as mentioned above we’ll have to judge this once the expected declines in EURUSD and GBPUSD are seen.

USDJPY still looks firm, the market perhaps still wary of the BOJ. I do see a higher resistance that may well be tested and would tend to fit into a more bullish medium term outlook. However, I don’t think we’re going to see excessive gains at this point although I do suspect we could retest the 88.11 high at some point. This also fits into a more bullish EURJPY structure as well, but this is where some care needs to be exercised as a slightly deeper correction does seem to be implied in the cross before it can resume gains…

AUDUSD still needs a slightly deeper correction but to be followed by new highs. USDCAD may have found an intermediate low – we’ll have to watch levels here for clues.

Thus, overall I am looking for a mainly mixed day with movements on both sides but with the main emphasis being on lower EURUSD and GBPUSD after deeper corrections higher have been seen and vice-versa in USDJPY. During this period we can then observe how USDCHF develops… My preference is for direct gains… but take care.

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)

Have a profitable week.
Ian Copsey

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Friday, September 17, 2010

Momentum appears to be slowing

I can’t say I was particularly satisfied with yesterday’s analysis. There were a few good bits but mostly it was off-target. The continued strength in both EURUSD and USDCHF sustained the unwinding of the bearish EURCHF cross while USDJPY was left floating in a cloud. I have to say that in general the underlying momentum of the past few days’ movements remains quite strong and there does seem to be more left in this. However, in the shorter term there are some signs of exhaustion and in spite of the incorrect calls yesterday I do feel a correction is due.

In the larger picture I have moved more strongly to the view that the call for a new low below 1.1879 EURUSD is less realistic now. However, I remain a little mixed as to whether the decline to 1.2586 formed a complete correction or whether a second leg is possible. The reasoning behind that lies in the solid bounce in USDCHF from the sort of support area I had outlined. This can also be said for the bounce from the 82.87 target in USDJPY… In GBPUSD the correction from the 1.5597 high has been relatively shallow and the correction higher stuttered more than rushed.

Therefore the jury is still out for me overall but stronger reversal signals haven’t quite yet appeared and even in EURJPY the overall rally doesn’t look exhausted. However, the shorter term does seem to require a correction before it can extend further. Thus, with some trepidation after yesterday’s calls I’m going to be repeating my calls for a correction but with the possibility of minor new extensions in USDCHF and maybe GBPUSD.

AUDUSD has started to become less clear. I feel a pullback lower is also due here but I’m not quite sure this will be direct. USDCAD has lulled into one of its choppy consolidations. I still remain more biased towards a minor new low before recovering…

Thus watch for breaks today that would suggest price will settle down to a brief period of corrective activity.

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. (+40 pips)

Have a great weekend.
Ian Copsey

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Thursday, September 16, 2010

There seems to be more risk of consolidation today

OK. Own up. Who let the BOJ know my target was at 82.87? They certainly picked their timing right didn’t they?

All joking aside, the reaction was excellent and even left the 85.22 resistance in its wake. The 85.90 swing high is a little more obvious and one of those that cause the market to wait for the next guy to take the plunge in trying to break the last major high in the sequence of lower highs in the downtrend. I don’t think it’ll happen today but I do feel it will break. It’s just a matter of time to allow a correction to develop and complete…

Having made that call I do have a feeling that this lead by USDJPY into a correction/consolidation may well be followed by the other currency pairs today. There is a risk in one or two for marginal extensions but if they are seen then I don’t think they’ll be too excessive. The rallies in USDJPY, EURUSD and GBPUSD have been sharp enough to cause some jet lag which has forced the market to assess whether this is a total reversal higher or just a correction.

Indeed, that is exactly what’s on my mind. The moves thus far have not quite completed a constructive “impulsive” structure - that is one that indicates potential for a more consistent directional move. It’s most certainly possible but where things stand now it is also the type of move that can also leave the market gasping by a complete reversal. However, at this point momentum is higher across the four majors and this will keep the market from trying to force a reversal. Hence, I feel the risk is for a consolidation…

Perhaps the only exception may well be GBPUSD which appears to be at a slightly different stage and having lagged in the rally now appears to have chance of catching up. However, if gains are seen today then I can’t see them being excessive.

The only possible party pooper I can see is EURJPY. It is hanging in the balance and is sporting a 4-hour bearish divergence but in trying to fit this unexpected reversal higher into a structure I am taken with an eventual move back towards the 114.73 high. This should be handled by USDJPY but the balance I find hard is the anticipated correction in USDJPY and quite what EURUSD does during that time… So as with any period of consolidation do take care…

AUDUSD… has to get above the 0.9456 high to extend its rally else suffer a deeper correction. USDCAD has fallen into a twilight zone where it could move either way though I still have a stubborn preference for the downside…

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

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Wednesday, September 15, 2010

A correction is due but has the Dollar sunk so much there is no way back..?

In terms of EURUSD I was very satisfied with the way things developed yesterday but that final high pushed up higher than I really feel comfortable with within a medium-to-long-term Dollar bullish structure. In many ways the fact that USDJPY bounced from 5 pips above my target and USDCHF 12 pips below my target is in some way encouraging but 4-hour momentum hardly supports a Dollar low at this point. Just looking at my belief that EURUSD could reach new lows below 1.1879 the higher than expected stalling point yesterday, while not 100% ruling it out, lowers the odds by a long way.

My concern is amplified by the fact that my basic multi-year view is for Dollar cycles to exert considerable downside pressure over the coming 2+ years. Therefore, when I see the current weakness it does dangle a carrot in front of my long term bearish nose…

Having said that I do feel there is some evidence that we should see a correction and a modestly firm one at that. We can then observe the key Dollar resistance levels in that correction to judge whether my concern turns into reality… or fades.

There does seem to be a degree of correlation that can be expected vis-à-vis the Euro and Yen as I still see this moving in a sideways consolidation but with the current bias towards the upside. However, there doesn’t seem to be that much more to go and thus the risk is for a reversal lower back into range. I suspect this will come from what may be a deeper correction in EURUSD rather than losses in USDJPY at this point. Thus, do keep this balance in mind. There may also be only a mild pullback, possibly even sideways consolidation in GBPUSD…

AUDUSD was probably the strongest performer and that may well continue. I see much less potential for a correction lower here after yesterday’s continued rampant gains with the outlook apparently quite bullish here also. Keep the upside more in mind here. USDCAD extended losses and there should be a little further to go but this being what I believe to be the penultimate leg in the 6 month consolidation I feel that we should be looking for that final reversal into range before what should be eventual follow-through lower.

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
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Tuesday, September 14, 2010

It’s time to regroup and adjust…

Well, yesterday put the direct Euro decline to bed. I haven’t totally given up on a new low below 1.1879 but have to concede that this move higher has made that event a little more extreme than I would have liked. However, before I can begin to contemplate losses again I still feel there is still upside risk that needs attention.

Two other significant developments yesterday were the limited gains seen in GBPUSD and the constructive losses in USDCHF. What I tentatively see in these two are continued consolidation and losses respectively which need to be managed within the general expectation of a pullback and rally in EURUSD. It does suggest a short period of relatively independent movement from the three Europeans but if this does develop then it could be quite a good indicator for the maturation of the complete correction. Therefore, I think today is going to be one that requires some care and observation across the three European Amigos.

A pointer may again come from EURJPY. Rather than see the more direct decline I had been anticipating it is beginning to look more strongly as if this cross is developing in a sideways consolidation – perhaps a triangle – that still has some way to go before it completes. If I am right in this observation then today is a bit of a down and up day that should eventually find a peak to return it back into the overall range. The entire pattern could take the remainder of the week to come to a conclusion.

The failure for USDJPY to break above Friday’s high has caused another about-turn that should keep the decline intact over today. I still suspect a new low but I am not in favor of a direct route so expect the entire structure to remain a bit choppy. The only thing about USDJPY that concerns is that the daily bullish divergence has brought no positive reaction at all and if it doesn’t stop at my targets then we could well be talking about a retest of the 79.70 historic low over the coming 1-2 weeks… I am a long term Dollar bear for another 2+ years but hadn’t really expected this to occur directly so the coming dip should be watched carefully.

AUDUSD stalled a few pips below the higher resistance at 0.9364 but appears to have exhausted itself so look for a bearish day. USDCAD has probably found support – or will not too far below – and I suspect a recycling of the correction back higher.

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. (+5 pips)

Good luck.
Ian Copsey

FX-forecaster Trader Package now available at €20.00 pm
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Monday, September 13, 2010

I really want to remain Euro bearish it doesn’t look like being direct…

I’ve been Euro and Pound bearish for the past two days with only success in the Pound. Even then the corrections have been deep and beginning to gnaw away at the bearish structures. Indeed, while I have been writing the report those resistance areas have broken. We have also seen EURJPY break higher, mostly driven by EURUSD but the risk for USDJPY to extend gains is also present. The latter has a few structures that could develop and this is adding to the general uncertainty.

USDCHF extended its pullback higher but cannot extend any higher without a total daily reversal I feel. I still prefer the downside for one final attempt but Friday’s high cannot be breached… The downside does at least correlate with potential Euro strength but the reliability of their usual correlation has hardly been something on which we can depend recently…

At this point I don’t really want to abandon the more medium term bearish Euro view but this will imply that the correction higher should not extend too far otherwise the entire structure from the 1.3333 high will begin to creak at the edges. If there is any way the larger bearish structure can remain intact it is probably with a more extended sideways consolidation.

I also note that GBPUSD hasn’t really broken its own bearish structure yet but is not that far away. We’ll have to keep an eye on this one as well as I really don’t want to see excessive gains here. Therefore we’re going to have to be aware of breaks levels today and I feel keeping trades for the shorter term is probably a better strategy.

USDJPY is also pushing resistance levels which does make me feel a little uncomfortable. Here I am a little more open for a reversal higher but conservatively we’re going to need a break above the 85.90 swing high to confirm stronger gains and until then I remain open.

AUDUSD is still rallying but there does seem to be good reason to look for a peak, and probably today. Whether this causes a total reversal or just a correction remains to be seen but as a first step look for the expected peak. USDCAD – still overall bearish but with a current risk of consolidation (and possibly messy) before the decline extends further.

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. (+15 pips)

Have a profitable week.
Ian Copsey

FX-forecaster Trader Package now available at €20.00 pm
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Friday, September 10, 2010

It’s now or never for the Euro and Pound…

Yesterday didn’t quite go as planned… Well, some of it did but not much. I have been bearish for the Euro and Pound and frankly, after yesterday’s moves it does seem like a case of “now or never.” That the Euro and Swissie chose to consolidate was rather frustrating. The decline in the Pound was constructive but now needs to press home the weakness else breaks above recent highs are going to look pretty bullish…

Having said that, in spite of the flat sideways consolidation in the Euro all it did was extend the correction for a longer period and that still implies losses. It can’t fail to go down now otherwise the bearish structure will be blown away. Indeed, to provide some idea of structure the decline should now be pretty persistent and if that fails to develop it will be an added warning that something is wrong.

EURJPY also joined the downside failures – perhaps quite obviously as it should be EURUSD that continues to drive this. What appears to have happened here is that the correction has extended and looks pretty much like a triangle which doesn’t have much more to go. This extension of the consolidation in early trading may well also limit the downside in EURUSD so we may have to be patient for a wee while longer.

Equally that also extends its influence on USDJPY which started off constructively as if it was intent on retesting the lows but then reversed in what appears to be a risk of a minor new corrective high. However, I still have this last leg lower still hanging in the air so keep in mind the combination with the ERUJPY cross to judge timing. I still do not expect an aggressive new low in USDJPY.

USDCHF also baulked at being pushed lower but it still has another leg lower itself and I can’t see too much topside left in this correction so be aware of the downside here also by the end of the day.

AUDUSD… ouch… that appears to be in one of its bulldozer moods with gains still to come. I have a feeling it won’t be as strong as yesterday with a pullback (at least) due before long. USDCAD… flip a coin… but keep in mind the eventual target is still lower. I’ll highlight key break areas that signal follow-through.

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. (+130 pips)

Have a great weekend.
Ian Copsey

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

Thursday, September 9, 2010

I still look for losses to develop across the board…

Actually, I mean that… It’s not something I like to call – that all four major currencies look bearish – but they do. The only one where I could accept a slightly deeper rally is USDCHF but it’s not my favored view… So perhaps the ideal trades to look out for that should provide greater value for money are the crosses… and yes, EURJPY looks very bearish as should GBPJPY.

Individually I feel USDJPY has the more limited downside. Following the sharp drop from the 85.22 high it was always going to be difficult identifying key levels as straight line drops tend to hide the projection levels. However, overall it does still seem to be in line with the targets I have been mentioning and all being well we should see hourly & 4-hour momentum develop some bullish divergences.

This will mean that EURUSD (and probably GBPUSD now) are more likely to see sustained declines that should drop to new lows in this move. While it’s obviously not my preferred view, if the declines do not develop strongly and begin to move back higher to break yesterday’s highs I will have to admit a deeper concern for either extended sideways consolidation or perhaps even a complete reversal in my underlying Dollar bullish outlook.

USDCHF has frustrated me a lot over the past few weeks by maintaining a stubborn bearish trend. Yesterday made further progress but while yesterday’s high holds the outlook does still look bearish for just a little more. As with USDJPY I am not quite so bearish here.

AUDUSD… I’d actually like to see a minor follow-through higher but feel this is due either a pullback, perhaps in the form of a recycling of the correction or just a resumption of losses in the intermediate term. USDCAD reversed nicely lower. There’s still a question mark over whether a marginal new low will be seen but I prefer it but here the day should see a correction 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. (+15 pips)

Good luck.
Ian Copsey

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

Wednesday, September 8, 2010

Probably a bit more of the same today…

EURUSD down… USDJPY down… and EURJPY had no chance of making a minor new high… While some of the supports on the way lower were helpful the decline in EURUSD in particular was far more persistent than expected and really does suggest we’re on our way lower to eventually test closer to the 1.1879 low. However, a pullback is due before long and it would be quite normal for the pace of descent to slow considerably in favor of a more choppy decline. The same can be said of EURJPY which had a more direct decline than I had hoped for but equally looks destined for new lows.

USDJPY also broke to a minor new low and should continue the general decline, perhaps in a less direct manner than EURUSD, but I remain with the belief that it will not be an excessive decline but should then spark a correction higher.

After having led the decline compared to EURUSD, GBPUSD had a more sedate day refusing to jump on the back of the continental decline to keep the general Dollar strength more subdued. It holds a risk of seeing just a little more but then a recovery. I’ll detail the key levels in the report but until the critical support breaks there is every risk of a recycling of the recent correction. Overall I am quite satisfied with the Euro outstripping GBPUSD as I still see that it will only be the Euro that will ultimately make new lows against the Dollar. Thus, expect GBPUSD to remain more erratic and choppy over the coming month or two.

USDCHF had a day’s break holding in a sideways trading range. I remain bearish here but not excessively.

AUDUSD remains bearish and USDCAD appears to be in a correction higher. Overall I feel this still has further lows to come.

Today’s free analysis is for USDJPY and can be found on http://www.fx-forecaster.com/DailyForecast.html along with yesterday’s Trader Package Review & Trade Set up report. (+55 pips)

Good luck.
Ian Copsey

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

Tuesday, September 7, 2010

We should see the Dollar resume its rally against EURUSD… at least…

The market has become terribly disjointed recently with the normal correlation between the 4 majors having dropped considerably. EURUSD & USDCHF have almost been rising & falling in tandem rather than the other way round while the last couple of days has seen EURUSD & GBPUSD suddenly moving of their own accord. This discordance does take away the general comfort of being able to coordinate respective tops and bottoms that adds a dose of uncertainty.

That EURUSD peaked in the 1.2907-21 area does appear to suggest that the correction is done with. This morning’s drop appears to be reflective of this. However, I’m finding it mighty tough to make sense of a similar direct loss in GBPUSD which I feel still needs a little sideways consolidation before it can resurrect the normal EUR/GBP correlation. So from that point of view I think we need take care early in this move. I do feel the losses in both of these pairs will be substantial over the coming week but the early stages still appear to require some degree of choppiness.

For USDCHF… well, I do feel this still has further to decline but probably not quite as deep as I had suggested last week and a larger reversal higher should be expected before too long. The daily bullish divergence is really quite solid now.

USDJPY… still betwixt and between… I can see an argument for direct gains but probably much depends on EURJPY. The cross has also suffered under the weight of this morning’s drop in EURUSD but has met with a key support area. Ideally I’d like to see one more high above 109.55 before it turns lower and remain with the opinion that EURUSD will be the driving force. This tends to argue a more bullish USDJPY but whether this generates a direct move above the 85.90 swing high is yet to be seen… There may still be potential for continued sideways consolidation while the expected (eventual) drop in the cross develops… Thus, this three-way balance still remains rather sensitive.

AUDUSD still looks supported but has a little duality about the near-term. We need to be aware of the critical support here. USDCAD does appear on its way lower but the question is how deep any correction will manage to push higher. It is still within the 5 month sideways consolidation and has further to go before it finally breaks out…

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. (+15 pips)

Have a profitable week.
Ian Copsey

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

Friday, September 3, 2010

Balancing on a high wire…

Please note that as Monday is a U.S. bank holiday the next report will be on Tuesday 7th September


Yesterday was almost a non-day with very little movement and providing little in the way of opportunity. In that case it doesn’t really change the picture too much… It leaves the Euro holding above the supports I outlined yesterday and below the final upside target. If I have any preference it is down and up on the day to complete the entire corrective price structure though the degree of the initial “down” remains a case of seeing a reflection of a mirror within a mirror which causes the extent of the pullback to be a case of judgment when it occurs.

One of the reasons I tend to prefer this still is yesterday’s high in USDCHF and slightly deeper decline. It’s a bit tough to be certain because of the current erratic nature of its correlation with the other Europeans. However, yesterday’s high was just 2 pips off perfection and therefore I’d like to see this accelerate lower. The issue here is that it should be far more aggressive than the rally in EURUSD… Still, as has been seen on several occasions the Euro and Swissie can drop side-by-side anyway so the timing continues to be a little tough to judge.

However, another supporting argument is GBPUSD. Its failure to extend the rally was a strong warning signal of stronger losses. However, if that drops directly then we have to expect EURUSD to hang on to GBPUSD’s coat tails… It’s not impossible as the downside for both of them remains my underlying bias but it does seem a bit too soon. I therefore feel that we’re going to see GBPUSD continue its sideways consolidation. There are two potential ways this can occur – a shallow consolidation or a deeper one but with the latter taking a little more time – probably until Tuesday.

I also still see EURJPY having potential to reach its upside target also. Whether this is driven by EURUSD or USDJPY is something to be seen. However, while a potential bullish structure is one possible outcome in USDJPY it would imply quite a strong move so we’re going to have to be on our guard in case the cross recycles to just above the 109.55 high… What I do feel is that EURUSD will be the driver of the final decline in the cross so we have a puzzle of just how these three balance the books… Take care until all is clearer from the EURUSD perspective in particular…

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. (-20 pips)

Have a great long weekend.
Ian Copsey

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

Thursday, September 2, 2010

Still a bit more to go… but could be messy

I can’t say everything went as planned yesterday, far from it, but the resumption in the underlying Dollar bearish correction lower did at least occur. The only problem was that without the correct structure the support & resistance went haywire. Just concentrating on EURUSD and GBPUSD I still feel the correction has further to go, the latter probably more so and this may well cause potential for some disjointed moves between the pair. It seems to me as if EURUSD needs a modestly deep correction whereas GBPUSD does not so what I’d like to see is more consolidation out of GBPUSD while the deeper correction develops in EURUSD… At the end of the day we should see them both higher but once this rally ends we should see the Dollar move higher resume.

Now… USDCHF… the warning was in the exactness of the weekly target… It’s just not normal to see that accuracy. However, the drop, when it came was again quite sharp and that forces me to abandon that pattern completely in favor of more losses. It has actually made a deep enough correction at 1.0181 so there’s little room on the upside but bags more room on the downside. While the potential for a longer correction remains (and clouded by the sharpness of the move to 1.0181) be aware of the continuing downside risk.

USDJPY… This is another that has frozen in mid-air, balanced between bullish & bearish. Which way it breaks in the short term will define the next move – whether it be to marginal new lows or just a direct resumption of gains. I remain with the opinion that, one way or another, this will recover but it’s more a case of whether that’s direct or from a not-so-deep-new low…

If I look to EURJPY for guidance it tends to make life even more complicated unfortunately. This pullback my just be a deep one for the downside to resume or we may just see a minor new high above 109.55 before that decline begins. Given the next decline in EURUSD should be a pretty solid one I’m still banking on this being the driving force. However, there is potential confusion in the anticipated routes in both currency pairs… Best watch out for key support & resistance to extract the clues…

AUDUSD was much stronger than expected and has me a little mixed which is similar to USDCAD which was much weaker than expected… I’d rather watch for the coming structure to emerge and taking into account the support & resistance areas to provide stronger guidance with these two.

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. (+15 pips)

Good luck.
Ian Copsey

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

Wednesday, September 1, 2010

I’m more in favor of the larger correction extending today…

There was a bit of everything yesterday… The Dollar lost out against the Swissie and Japanese Yen but made gains against the Euro and Pound. The Pound even managed to reach fresh lows but there’s something about all of this which smells of confusion – enough to suggest that against the Euro and Pound we are still moving through a complex correction.

Let me cover USDCHF first. 1.0140 has been the long standing target and after a round-about manner of getting there finally managed to hit the bull’s-eye yesterday. I’m obviously delighted to have my target met but have to remain somewhat cautious for a couple of reasons. First of all this is a weekly target involving a pattern that started almost 2 ½ years ago. For price to have settled within 6 points of this is quite unusual. Secondly, while there are is modest confirmation from hourly and daily momentum, the signal is not uniform. There is still some work to be done to have this low confirmed.

EURUSD… bounced nicely from the 1.2607-30 support area outlined yesterday. This looks positive but for the moment looks embroiled in a sideways trading range. Once complete price needs to break higher to generate the next leg higher. In the meantime GBPUSD stalled in a critical support area that would raise the risk of a recycling of the correction back up to the 1.5597 area again. However, we have to be aware of a minor new low before that can happen. These two pairs therefore need to be observed, noting the key supports for them both to react higher…

Then the question is whether USDCHF will remain uncorrelated to its European brethren…

USDJPY moved lower again which was expected but I’m noting a slight compaction in the structure. I remain open to either side but note the monthly, weekly & daily bullish divergences that I continue to feel will limit the downside. I still can’t rule out a marginal new low, and in some ways would suit to generate shorter term bullish divergences, but I feel we should remain aware of the key resistance levels that would imply direct resumption of gains… However, looking at EURJPY I am more in favor of a retest of the 105.42 area but a deeper pullback is due before it can make what I feel will be a final decline… This tends to suggest a weaker USDJPY…

AUDUSD – I still feel this remains in a large sideways consolidation that still needs to edge lower first before recovering. Equally, USDCAD needs a pullback before rallying…

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. (+140 pips)

Good luck.
Ian Copsey

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