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HARMONIC ELLIOTT WAVE

Friday, October 29, 2010

The Europeans still appear to be on track – just a little more to go…

The European currency pairs have progressed close to expectations. Being in a corrective pattern, a time when patterns can morph into alternative complex structures, we still need to be alert to developments that would suggest a breakdown. As I see things, the balance of the relative structures all appear to be matched in terms of the moves required within their respective positions. Basically, that’s a follow-through from yesterday’s move followed by a deep-ish correction.

That should just about sum up today’s anticipated moves. Early trading implies a slightly deeper correction which should spurn further losses in the Dollar with perhaps GBPUSD most likely to be the strongest of the three. These losses should then be followed by modest strength in the Dollar but more as a correction rather than the stronger directional moves seen over the week. That should see out today’s price action. If I have any doubts on any of these then perhaps it is in USDCHF which saw a limited reaction yesterday and *maybe* potential for a minor new high.

Where things went wrong yesterday were in USDJPY which saw a break of the early support identified that triggered a stronger decline. That leaves me a little uncertain. I am, as always, aware of the larger bearish risk but still have a few doubts that they’ll develop directly. This one will require a little diligence to navigate the next moves.

EURJPY appears stuck in a mire, with a structure that remains difficult to indentify. I can see reasons for this to go in either direction but right now something dramatic appears to be required to generate a difference in the strength of reactions within the individual currency pairs. This doesn’t really seem to be on the horizon today…

AUDUSD appears to need a correction before it can follow-through higher. USDCAD has gone into one of its crazy sideways consolidations…

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. (+25 pips)

Have a great weekend
Ian Copsey

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

Thursday, October 28, 2010

EURUSD moved according to plan… but now can it complete that plan?

Another day of partly good & partly not-so-good. What did work well was EURUSD which maintained the bearish move and bounced from the low end of the target range I highlighted. While I hadn’t expected it yesterday USDCHF bounced from the upper target resistance range also. Of course, GBPUSD ruined the day for the 2nd day in a row…

Today could be a crunch day. The Dollar resistance levels in EUR & CHF are the crucial barriers between continued consolidation and a much deeper Dollar corrective rally. Whatever happens I feel the first move today should be back lower for the Dollar but probably by not too far. I suspect the Dollar upside will come under pressure again and then we’ll have to see how it fairs… It could even go through a sideways move but the end result will come from a break of range. The same will probably be the case with GBPUSD.

For me the Dollar’s downside has more attraction. However, I can see some conflicting indications so will want to watch how the initial moves develop. Even if it declines in accordance with my preference I don’t think it will get anywhere particularly quickly since the EURUSD correction is not yet complete. Even if there is follow-through higher, again I’m not totally convinced that the move will generate a sharp follow-through. Therefore I feel we’re going to need to take care today.

USDJPY maintained its rally and just a little above where I had though it would stall. The short term structure has become a little messy and given we have reached minimum targets we should be more cautious for the next move. My preference is still higher but price can’t really afford to move below yesterday’s corrective low…

So what does this mean for EURJPY? Well, it could extend gains in the first half of the day and then we’ll need to watch here also. Any break much below the low seen overnight would tend to push it down.

AUDUSD is in the same boat as the Europeans. USDCAD has its own boat, doesn’t share it, but does require the same caution as everywhere else…

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

Wednesday, October 27, 2010

This appears to be heading for a briefer correction that expected…

Apart from GBPUSD I was content with the way things developed yesterday. As long as I haven’t made any mistake the decline in EURUSD (and rally in USDCHF) developed close to expectations and keep the correction on track. I mentioned the possibility that EURUSD could remain in a sideways consolidation for a while longer and the route it has taken does raise the chances that this will occur. However, with USDCHF expected to make a new high and the runaway recovery in GBPUSD does mean the situation needs to be managed well.

For today this should mean that EURUSD makes a minor new low while USDCHF should not breach yesterday’s 0.9881 high. GBPUSD should extend its gains and probably after EURUSD has made its low and begins to correct higher. At the same time USDCHF should extend its own correction… The result should then be that once EURUSD and GBPUSD reach their highs, USDCHF its lows, then we have one last pullback in EURUSD, a correction in GBPUSD and a final rally to corrective targets in USDCHF.

Well, that does appear to be the logical and tidiest solution to cope with all the anticipated moves. The end result will complete the Dollar bullish correction and allow the larger downtrend to develop… The only possible alternative is that USDCHF has already seen its high and will decline a little more sharply today but not retrace above yesterday’s high… All these moves should require more than today to complete – probably into tomorrow - but keep this general pattern of moves in mind.

USDJPY… rallied nicely but does not appear to have reached an end yet. There does seem to be a little more to go and maybe into the mid-82’s. Beyond that I am mixed and have to see how the cross develops. EURJPY didn’t meet my downside target yesterday but lapsed into sideways to upwards consolidation. I still feel there’s some upside in this but the balance between EURUSD and USDJPY expectations still causes me some confusion in terms of whether it will revert to a larger decline or continue higher. However, any bearish move will apparently require USDJPY to be exceptionally bearish and while I feel this will eventually occur, I’m not sure that now is the right time.

AUDUSD is still a bit mixed and quite how it develops today should provide a guide to whether it continues its consolidation or resumes its uptrend… Given the expectation that EURUSD will begin to rally by end of tomorrow or Friday this may impact on AUDUSD also. USDCAD seems to be still in a correction…

Today’s free analysis is for EURJPY and can be found on http://www.fx-forecaster.com/DailyForecast.html along with yesterday’s Trader Package Review & Trade Set up report. (+75 pips)

Good luck
Ian Copsey

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

Tuesday, October 26, 2010

The Dollar should make gains today… how far… well, that’s another story

I can’t say yesterday’s moves surprised. They were quite hard to actually forecast but within the general theme of daily Dollar bullish signals and intraday weakness the final outcome was quite satisfactory. From this point we should see the Dollar make some gains. However, the more important question is “just how much?”

As we moved into this anticipated daily correction I was considering a modestly deep one. I can’t really rule it out but I have a few nagging doubts. Yesterday’s stalling point in EURUSD was more indicative of a sideways consolidation which would imply that the 1.3696 low may well not be reached again. It is in one of those structures that could either remain in a consolidation or make stronger losses. However, the restraining factor for me is USDCHF which has effectively completed 2/3rds of its pullback higher and this drives me to the conclusion that we may not see EURUSD break from its range.

The how about GBPUSD? This has a rather ambiguous potential. For now I’ll remain conservative and suggest that it could initially remain in range but does look like correcting a little lower than the 1.5649 low seen already. However, if there is any price shock then a sharp drop cannot be ruled out. Therefore, for now it’s bearish but just keep in mind the structural possibility of a much deeper decline.

How about USDJPY? Obviously the market is eying the April 1995 79.70 low with lots of calls and opinions. Without a doubt it will break at some point but I am rather ambivalent about whether this occurs right now. Yesterday’s decline stalled 4 pips above my 80.36 target. Here I have a slight problem. That target was not a final one and indicates another new low. However, I am also mindful of a target implied by the daily chart around the 73.50-74.50 area but not convinced we shall see this directly…

I am also looking at EURJPY and still see this is a rather volatile period that can still see a small decline but then recovery before it can extend losses. Therefore matching the overall moves in EURUSD and USDJPY appears quite sensitive and for this period the progress of this corrective price activity I’ll remain rather cautious about this love triangle.

AUDUSD may just make a small retest of 1.0001 but I’m more inclined to the downside thereafter. USDCAD still needs to extend losses…

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. (+10 pips)

Good luck
Ian Copsey

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

Monday, October 25, 2010

There is still short term confusion but the larger picture appears to point to a higher Dollar

The indecisiveness of Friday’s General Outlook indeed reflected what was happening in the market. Looking at the shorter term wriggles and whips (a.k.a. corrective price action) I find the overall situation really hasn’t changed. What I did find from a weekly indicator wrap up was a general indication that the Dollar is due to correct higher…

As you will know, this has always been my preference and supported by the same expectation in the DJIA and gold. However, the shorter term really hasn’t cleared that much and provides a general confused mess. I am therefore tending towards a stronger Dollar but with a short term caution being generated by a very unclear picture which will either continue with the current status quo – that is further consolidation – before the Dollar finally manages to wrestle up enough strength to push through to new corrective highs.

This doesn’t alter my overall Dollar bearish view and this should always be kept in mind in case it does just follow-through directly, but all round, including the DJIA and gold, the implication is the same – a daily pullback before the trend resumes.

However, once again I’ll point out the influence from EURJPY. This didn’t quite work out as I had expected but then remain broadly in line with my underlying feeling that we still have a second dip lower to come before a recovery to complete a correction within a larger decline. This is more in line with a larger bearish view which could initially be fueled by a lower EURUSD but given I feel the downside of EURUSD is limited it is highlighting (probable later) potential for USDJPY to extend a little sharper lower.

I have to say this is still a little hazy in my mind in terms of the impetus required to generate enough thrust for the cross to reach down to around 100 and therefore I’ll take it step by step and we’ll need to observe exactly whether the thrust develops or not.

AUDUSD is also included in the general Dollar strength. USDCAD still appears to need a slightly deeper correction lower.

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

Have a profitable week
Ian Copsey

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

Friday, October 22, 2010

Neutral

It looks like the bearish Dollar risk has been brought back from the brink. Given this is a correction it leaves the door open to a few scenarios which is going to make the descriptions of what to look for quite complicated and may well be a signal to take a long weekend. I perceive the Dollar risk as higher but even within that there is a minor risk of EURUSD making one more blip higher – probably not but I can’t rule it out.

I much prefer a reversal lower in EURUSD as I see the same in EURJPY. Given USDJPY has a strong tendency these days to spend 90% of the time in sheer boredom, separated by 10% of total panic, as long as the panic doesn’t occur today then a lower EURUSD should be the driver of the cross.

USDCHF looks positive, GBPUSD mixed but currently on the weak side and may just extend losses to new lows. However, with the deeper correction higher I’m not expecting dramatic losses. Sideways consolidation is the only alternative as far as I can see at this stage.

On a side note the DJIA actually made a new high in this rally above 11,200 but below the 11,258 high… I’m not going to get too excited there until the 11,258 high is taken out and I doubt it will just yet. Gold lost out as I had suggested and while it depends on which leads the others, the corrective scenario seems the stronger of the choices right now.

AUDUSD confuses so I feel we should avoid that until a stronger break is made while USDCAD should lose out again today.

That’s it for the week… It hasn’t been a particularly incisive outlook but I feel that actually reflects the probable outcome today…

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)

Have a great weekend
Ian Copsey

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

Thursday, October 21, 2010

Groundhog Day

The past 2-3 weeks have been somewhat of a recurring nightmare. My long term view is Dollar bearish but feel a correction is due. You may recall my statement some while ago that the problem with this particular part of the wave structure is that corrections can be shallow and look like part of the trend or they can be deeper. Punxsutawney Phil keeps popping his head in and out of his burrow trying to see the light of day and can’t make up his mind…

Yesterday I had seen the peaks in the DJIA, gold and the drop in EURUSD as having a rather enticing correlation but that soon came to an end. Actually, I had a look at those other two yesterday and still feel they should both correct a little deeper though I can’t get particularly bearish as, particularly in the DJIA it is in exactly the same part of its wave structure as EURUSD and therefore has exactly the same dilemma in terms of just how deep it needs correct.

The pullback higher in EURUSD does look quite convincing and I can see an argument for a move back above 1.4100. However, it will then require a correction. I can see an argument for USDCHF to extend losses and the pullback higher in GBPUSD does have a certain depth that threatens to extend…

Having been bitten in the backside a few times over the past few weeks it’s really tough placing much confidence in a groundhog so what I plan to try and describe in today’s analysis is just how things need to develop to confirm further Dollar losses. If it fails then I may just take a shotgun and fly to Punxsutawney… However, the objective is to try and confirm one way or another just whether this Dollar decline has legs to finally follow-through…

Even USDJPY reversed back lower. The problem here is that it could just be part of a complex correction and bounce right back to 81.91-82.34… Again, where the clue may rest is in EURJPY… It bounced earlier than I had expected but does retain the potential for larger losses. In the near-term however, I think perhaps we’re going to exercise some caution until the larger break is seen.

So… today I will approach the market with more caution and will be looking for the right clues to confirm whether I need book my flights for Punxsutawney or whether Phil lives to poke his head out of his cage one more time…

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. (+15 pips)

Good luck
Ian Copsey

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

Wednesday, October 20, 2010

Yesterday sorted out the dithering…

I think yesterday price made a definite decision and has thankfully ended the admitted dithering I had over whether the Dollar would resume its downtrend or would correct deeper. Clearly it has chosen to correct. While I could see evidence of follow-through I was never 100% comfortable with the call and mainly because the DJIA and gold had reached targets which also suggested a pullback. Does Forex lead these two other markets or vice versa. As far as I can see it’s Forex that currently holds the controlling power but the argument for a pullback in the other two was quite convincing.

So, all cleared up now thankfully and we can now plan the remainder of the pullback. If you recall I had originally been given information about a potential cycle low around the end of this week or possibly into early next week. From what I can see of the move so far I feel that’s quite possible. What does concern me is that this is a correction to the rally from 1.2586 which has taken almost 2 months. One week of correction does seem very short… I think therefore we need watch how this correction develops as it does seem to hold risk of generating a sideways consolidation. This is also valid for the DJIA and maybe gold – but I’ll keep the doors open on the latter.

The general Dollar strength should spill over onto the other currency pairs – USDJPY seems to have now confirmed a modest correction, AUDUSD looks bearish also while USDCAD has shot back into what had looked to be a daily triangle and threatens a completely different structure. For today it should correct but I suspect further gains later…

The other currency pair which I feel of more importance – or interest at least – is EURJPY. I am coming to the conclusion that it still has one more medium term decline to come. It shouldn’t be a straight line as we’re due what I feel will be a deep correction. Once that is complete the decline can be a lot more robust. This tends to work more with a consolidating EURUSD as I intimated above and a more sharply declining USDJPY a further down the road…

Thus for today concentrate on identifying Dollar buying levels in general and which should continue through to the end of the week at least…

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. (+20 pips)

Good luck
Ian Copsey

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

Tuesday, October 19, 2010

The Dollar bearish structure remains intact but risks are still evident…

Yesterday’s pullback in the Dollar was deeper than I had been looking for but the underlying structure remains Dollar bearish. By this I mean that key Dollar resistance levels have not been breached and therefore the (Dollar) swing highs and swing lows are still declining. While I still have a preference for Dollar losses extending I do acknowledge there are a few grey areas that need to be sorted out to confirm extension lower. Whether this will happen by the end of today’s trading or not is not clear at this point.

One big sticking point for me is GBPUSD. The decline here was pretty deep, almost to the point where I could argue for a retest of the 1.5754 low, and maybe slight breach. I would not be happy for yesterday’s low in EURUSD or high in USDCHF to be broken. Thus this triangular relationship is central to what happens next.

It is still possible for EURUSD to correct lower – but not break yesterday’s low to allow GBPUSD to reach target. However, yesterday’s USDCHF high is a little more critical. Maybe I could bend to minor breach but frankly this does need to resume losses quite quickly to maintain the downward structure. Of course, any direct rally in GBPUSD would be the perfect solution all round.

Therefore, keep all this in mind when assessing the support & resistance levels and what constitutes confirmation of the preferred Dollar bearish trend…

USDJPY… after yesterday’s performance doesn’t deserve a mention… but what is more important I feel is EURJPY. I can still see a great deal of ambiguity here and it’s not clear quite when this will be clarified. We really are talking the difference between a drop to 100 or a rally to 120… However, I still maintain that the downside is going to require EURUSD to break lower – below the 1.3774 low… Until then the balance is still biased towards the topside but there’s also still a reasonable risk of consolidation.

AUDUSD is one where I am finding hard to identify the structure. The trend is higher so retain that bias but be warty in the near term. USDCAD – rallied yesterday and back to the area around the daily triangle low. I can’t see it much higher though there does remain a small risk that we could see one more follow-through before the break of the triangle finally generates a more directional break lower…

Today’s free analysis is for USDCHF and can be found on http://www.fx-forecaster.com/DailyForecast.html along with yesterday’s Trader Package Review & Trade Set up report. (+35 pips)

Good luck
Ian Copsey

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

Sunday, October 17, 2010

This doesn’t look like a recycling…

No recycling means we are still in a Dollar downtrend… It seems quite inconceivable in some ways given the virtual straight lines we are seeing on charts. These are being accompanied by a clear weekly trend, weekly & daily swing highs and lows all being retained in a trending sequence and daily momentum displaying only very minor signs of divergence.

In turn this suggests that the only margin of uncertainty lies in the shorter times frames where hourly/4-hour corrections can produce temporary morphing of patterns and complications but still within the underlying trend. However, while these shorter time frames are displaying some signs of Dollar bullish divergences, many are rather mature and have been developing for long enough for them to break down.

The clear message is: while I do see some risk of a pullback to Friday’s losses the overall impression I get is that the correction I was anticipating appears to have been seen. Frankly it was hardly much of a correction… I can’t help feel we’re going to be ending the coming week with the Dollar much lower again…

If there is any currency that has any stronger risk of bucking that trend technically then it appears to be AUDUSD. However, this pair has a long history of breaking divergences and maintaining the most direct trends so I’ll wait for stronger evidence of a stronger pullback before getting too excited about that one…

Now, if there is any uncertainty for me then it is derived from EURJPY. This one remains on the “to watch” list as it hasn’t really made a clear signal as to what it wants to do. I can see short term signs of breaking down and an ideal target around 100. However, it was also a hair’s breadth from breaking the bearish structure with the move to 115.67. There has been a daily bearish divergence but has not really made much of a dent on the downside.

However, if this does go down there has to be a driver – and unless I’ve got EURUSD messed up and that we’re due a larger decline, it’ll mean that USDJPY has to drop like a politician’s ratings… even more so if EURUSD is to continue its rally. While I am very bearish for the Dollar over a 2-year term I do feel we are at a point where we need a correction in USDJPY, not quite yet, but before too long. Therefore the cross should somehow find its way back higher but the short term does hold some uncertainty until it makes its break…

So for today there seems some early risk of the pullback extending but we should see the Dollar resume its losses later…

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. (+95 pips)

Have a profitable week
Ian Copsey

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

Friday, October 15, 2010

The recycling theory is holding together… but not quite yet confirmed…

The Dollar losses against the Europeans and Aussie have held the critical Dollar support levels to retain the risk of a total recycling of corrections… Working with what I feel should be a Dollar cycle high by the end of next week this still seems to be the best fit. However, at this very point in time I can’t say for certain that reversal higher has yet been confirmed. There are certainly early signs that encourage but not quite definite enough.

So we need to work with this still, exercising some patience to ensure that the anticipated move develops. Now, given the one-week time span the implication is for a long slow grind lower that is likely to be very messy indeed. Therefore, do take care at all times.

AUDUSD… is much the same as the Europeans but I feel there is a slightly stronger argument for losses here which does encourage the bullish Dollar correction more.

If there is any currency pairs that can buck this pattern it is USDCAD and USDJPY… Both still seem to be within bearish structures although within those there is still risk of an initial correction. If anything I feel these may be the better pairs to look for more definite trading opportunities. USDJPY does have a limited downside target which should spurn a deeper pullback although USDCAD appears to have a more persistent downward trajectory. Perhaps the risk here is for some intermediate sideways consolidation on the way.

EURJPY is kinda looking positive but hasn’t quite done enough to be totally confident of the upside. If there is any immediate upside then it’s limited. However, if support caves in then the downside has a deeper potential for a more substantial move.

Finally, if the Dollar recycling fails – by breaks of yesterday’s lows then the rather direct Dollar decline is going to continue – and probably with limited corrections…

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. (+85 pips)

Have a great weekend.
Ian Copsey

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

Thursday, October 14, 2010

The depth of yesterday’s pullback is bugging me…

I do really want this Dollar bullish correction to continue… but I do wish yesterday’s decline would come to a halt… All around in the Europeans the Dollar has declined right to the limit of my acceptance. The underlying correction I have been anticipating is one of those that has no real set retracement ratio but what we have seen thus far just doesn’t seem enough… Indeed, EURUSD does just resume its rampant uptrend the ratios from two perspectives would actually still slot in nicely…

But really… this is meant to be a correction to the rally from 1.2586…

For now, I’m going to approach this with caution. If this is going to be a very shallow correction then I can still see potential for some complications that could generate recycling and until those barriers are overcome I’ll remain open to both sides of the market.

I did review USDCHF and USDJPY yesterday, going back into the monthly & weekly charts and found some interesting long term implications, of course Dollar bearish which has always been the larger influence in the background from both structure and time cycles. However, in both I still find the base of the current move still a little vague. This adds a little to the uncertainty of current developments.

To add to the overall Dollar bearish implications both AUDUSD and USDCAD saw the Dollar extend losses, in the latter quite considerably. Indeed, with USDCAD having broken lower from a 6 month triangle the downside is most definitely vulnerable and on the verge of confirming a stronger follow through if yesterday’s low is broken by much more… AUDUSD is in much the same situation as the Europeans in that it is still in an area that could generate a recycling.

Finally, on the EURJPY cross yesterday’s rally was constructive but still has a little more to go on the upside to suggest it will resume the larger uptrend.

Overall then, I can see some conflicts and possible complications so today’s analysis will remain balanced and due observation will be required at key potential break levels…

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. (+120 pips)

Good luck.
Ian Copsey

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

Wednesday, October 13, 2010

I think we can say the Dollar low is in place…

Yesterday’s moves tend to suggest the Dollar low is in place. The only doubts I have are in USDCHF and AUDUSD which seem to be resisting the lure for a deeper correction and probably USDJPY also.

The latter caught me out totally. My charting software completely missed the dip to 81.37 seen over Monday’s bank holiday but didn’t really generate any gap in my chart. This has forced me to perform a larger review with the result that the larger decline (which has a long way to go) is underway. What is giving a little problem is identifying just where a correction should develop. We do have hourly & 4-hour bullish divergences but there has been a general lack of power on the upside which, if this persists, would maintain the downward momentum… I just have some reservations given the expected follow-through lower in EURUSD. Therefore, this one remains just a little uncertain.

EURUSD bounced to the point from the 1.3774 support and may well have completed the correction. If it hasn’t, then there’s not much further to go before we see losses resume here. The same can be said of GBPUSD. Both are probably mid-way through their respective correction but we must be aware of the strong chance that the move could stall and consolidate before the decline resumes more firmly.

As I mentioned, USDCHF does appear to be an odd one out in particular. Had 0.9554 been the final low then a move as high as 1.0370 was indicated. Given the limited nature of the anticipated correction in EURUSD the apparent USDCHF target is way too high – unless some greater catalyst causes a spike. Well, I’m not that keen on waiting on a freak happening and this does tend to imply the general daily downtrend remains. We should see some sort of correction but I am finding the identification of this structure just a bit difficult. Thus take care in this currency pair.

I remain with a balanced view on EURJPY and wait reactions. AUDUSD seems to have settled into a range and appears to threaten a new high at some point. USDCAD is probably in the same boat – a consolidation – but with the downside the stronger final risk.

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

Good luck.
Ian Copsey

http://www.fx-forecaster.com/TraderPackage.html
For MT4 users

Tuesday, October 12, 2010

The Dollar low is still a debatable subject but there is some evidence that it may be in place…

In the end Friday turned out to be much of a damp squid with the usual display of frantic confusion following the NFP numbers but then settled down into a display of virtual nothingness that extended through yesterday. No key swing Dollar swing highs have been penetrated so by definition the downtrend may still be in place. On the flip side I can’t really see much evidence of any constructive Dollar weakness.

So we are left a little in limbo having to wait for confirmation one way or the other. In the larger picture I am still eying the end of next week and possibly into the final week of the month as an approximate timing for a corrective low and given the distance that needs to be covered I would actually like to see the correction develop directly.

This is going to require Friday’s low in EURUSD to break and the 0.9700 high in USDCHF. However, take care as although they register a confirmation of reversal I’m not convinced we’ll see direct follow-through without some correction. Remember, this being a correction, the normal structural development is characterized by erratic and choppy trading.

On USDJPY the 81.69 lower support was reached within 2 pips. Momentum conditions do support a reversal but here the key swing high is at 82.55. Once this breaks we have the same potential for a larger recovery but this may not seem quite so erratic.

How the combination of a decline in EURUSD and a rally in USDJPY is going to develop is less clear. This cross has dipped rather deeper than expected and brings me to a more neutral outlook. I still feel in the much larger picture that a deep rally is possible. The problem I face is whether the rally we have seen is part of a daily complex correction that could force a test of 100 or whether we’ll see further gains once the current consolidation is complete. Until that is made clearer I think we need approach this with greater care.

AUDUSD is in the same boat as the Europeans and requires some confirmation of the next move – but clearly we have a deep daily bearish divergence so the downside risk is highlighted. USDCAD… I’m mixed here too. I tend to favor lower but just want to have price demonstrate a stronger intent.

Today’s free analysis is for GBPUSD and can be found on http://www.fx-forecaster.com/DailyForecast.html along with Friday’s Trader Package Review & Trade Set up report. (+30 pips)

Have a profitable week.
Ian Copsey

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

Friday, October 8, 2010

Was that it..? Maybe… maybe… but maybe not…

With Monday being Columbus Day holiday in the States the next report will be on Tuesday


I woke up (much too early) this morning, turned on my PC, looked at EURUSD and thought… “yup… that should do it.” However, going through the analysis I began to have some doubts. First came USDJPY… oooh, didn’t like that one, then EURUSD… well could have seen the high, but hmmm, if I look at it this way I could see one more high. USDCHF next... no, definitely need a new low here; GBPUSD … oh, still a mess… but you know what I reckon that needs a new high too; AUDUSD… difficult to call yesterday as the final high…

To add to that I still think DJIA needs another spike higher too – probably to the nearer target at 11,088…

So by a vote of 5 ½ to ½ we still need another push lower for the Dollar. However, that should be the final low… The move has done enough and a correction is due across the entire range of currency pairs, DJIA… gold… well, I have to think about that one…

What is more, by and large it looks like the correction from yesterday’s Dollar lows is complete. Maybe there’s a small risk of marginally deeper corrections in AUD & GBP but the rest really don’t have much more room in the correction without spilling over onto the edges of direct continuation of the larger correction. So do bear that in mind also…

I’ve just had an email kindly telling me that it’s NFP day. No, I didn’t know, though if I had time to sit and think then I guess it’s obvious. So that may well put paid to 75% of the day with 90% of the day’s move likely in the space of 2 nano-seconds after release…

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. (+50 pips)

Have a great long weekend.
Ian Copsey

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Thursday, October 7, 2010

Almost there… just a bit more…

I’m just a bit disappointed that we didn’t get a deeper early pullback yesterday but the final result in a lower Dollar is basically in line with expectations and today does look like being a repeat… The only slight concern I have is the apparent differing proximity to the final targets between EURUSD and USDCHF… perhaps even GBPUSD also. There’s not an enormous difference in terms of points but when considering structure USDCHF certainly seems to need a further pullback from a marginal new low whereas EURUSD just needs one more rally.

Therefore I have to consider the potential for a more complex correction in which EURUSD moves sideways while USDCHF corrects, satisfies that marginal new low and then for them both to reach respective targets. As for GBPUSD, well, it’s just dragging its heels and making hard work for itself trying to reach its targets. Again, it could well imply a more complicated correction to allow the necessary foundation for the final leg higher.

USDJPY – did what it oughta… but tantalizingly stalled 6 pips above the ideal target. Has it completed the decline or does it has one more push to the downside? Frankly the pace it is moving these days makes it very tough to be certain of the structure. What I do feel is that even if there is a new low it will be marginal and I am beginning to eye the upside.

I think it’s needed too to allow EURJPY to maintain its rally. Obviously EURUSD will do it’s share of the work until it reached its summit but there may well be a little more work to do after that. Yes, there is a correction due but there are still a couple more upside targets (and intermediate corrections) to go before that larger correction. As EURUSD declines (and this is more likely to start from tomorrow or Monday) USDJPY is going to have to do one of its impersonations of a rocket in flight to maintain the upward trajectory for the cross. Today looks quite a standard continuation of recent price action though.

AUDUSD – still has further to go rather as elsewhere. The same is true of USDCAD which certainly looks to have stated its long term intent to push lower. However, the larger decline does not look like developing directly although a marginal new low is still expected by tomorrow before a larger correction.

The DJIA also looks on target to reach its high by tomorrow… Gold doesn't look like a million miles from its high too.

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

Good luck.
Ian Copsey

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Wednesday, October 6, 2010

The scenic route is climbing its way to the summit…

Well, in EURUSD it is… as for the Dollar it’s taking a look through the cellar door...

I tried to be too clever yesterday with the more complicated correction scenario. In the end the Dollar downtrend resumed directly. I could argue the risk for the correction to recycle back to yesterday’s 1.3639 low, and at the moment it’s still a valid possibility, but looking around the mood remains Dollar bearish and I’ll stick to the more direct attack on targets.

Some while ago I offered some information on the Dow Jones Industrial Average forecasting for a rally to begin. It started very soon afterwards and yesterday stalled marginally below 11,000. Since then its rally has matched that of EURUSD and it appears no coincidence that it is now closing in on an intermediate target between 11,100 and 11,230 from where a correction is due. The correlation does seem persuasive as we are now due to see the Dollar find a low over the next few days. Both Dollar and the DJIA (despite the continued negativity of the core body of traditional Elliotticians) will develop in only as a correction over the next 2-3 weeks. Beyond that the rally in both EURUSD and DJIA should continue.

Back to Forex. Today should begin with a pullback from yesterday’s lows but as long as the recycling doesn’t develop we should see Dollar losses by the end of the day. This does appear to be a common theme across the currency pairs even including EURJPY. I have begun to be a lot more bullish on the JPY crosses and sense we may have seen a major low at 105.42 that should, over the long term, edge its way higher. This implies a less aggressive decline in USDJPY over the coming months.

For now, there is risk of a pullback in USDJPY as well but the original target remains after which my favored outcome is a reversal all the way back to the 85.92 high.

AUDUSD still pointing higher. USDCAD has declared its intention also but take care here as I wouldn’t be surprised to get a second sharp pullback higher…

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

Good luck.
Ian Copsey

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

Tuesday, October 5, 2010

The Dollar extension lower appears to be taking a more scenic route…

It seems I was too hasty in looking for the Dollar decline to follow-through. Yesterday’s developments at first caused me to doubt my targets but on review the downside failure is perhaps a more difficult structure to follow than the Dollar taking a more scenic route to the eventual targets.

So… what does that mean? I don’t think there’s a single answer to be honest and if I’m right in that view we could see a variety of individual performances in the Europeans. On a broad basis I’d look for EURUSD to make a marginal new low early I the day but then correct higher. This will probably still imply further low to come by the end of the day at the earliest and quite possibly into tomorrow.

While EURUSD makes its early declines I would like GBPUSD to remain sidelined but then get carried higher by EURUSD to a new peak in this move but remain below the 1.5921 high. Now, what USDCHF manages to do is a different matter… This has shown its ability to mark its own course anyway and I feel this one will require more observation rather than action today. The end result may well be neutral I feel.

Therefore, the sum of all these moves should be that we’re going to see some choppy sideways moves, marginal breaches and reversals. By tomorrow we should see a Dollar corrective peak that should then spurn a move to the low I had envisioned yesterday – so perhaps we’re talking a low by Thursday or Friday now.

USDJPY… the moves here have been so complex it has been hard to follow. Yesterday’s rally was particularly sharp but then the reversal equaling the upward velocity. It has already begun to rally this morning and I actually favor a higher high today but I’m not convinced this will follow-through much above 84.00… We’ll have to watch the reaction there.

The combination of moves in USDJPY and EURUSD is going to make EURJPY quite choppy and much will depend on timing and any correlation. I’m not totally comfortable with the way the cross is developing but with the prospect of an eventual rally & reversal in EURUSD (that is the rally to the end of the week) and the potential for the 84.00 area to cap the impact on EURJPY could well remain choppy.

AUDUSD… whew, mixed here. I still have a bullish bias but whether this turns out to be direct or not is unclear. USDCAD bounced from 3 points above the 1.0176 target… how it develops from here is crucial.

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. (+20 pips)

Good luck.
Ian Copsey



I SHALL BE DISCONTINUING THE TECHNICAL TRADING WEBINAR OVER THE NEXT 2-3 MONTHS TO BEGIN PROVIDING ONLINE SEMINARS IN HARMONIC ELLIOTT WAVE. FOR THIS TERM I SHALL BE WILLING TO PROVIDE THE TECHNICAL TRADING WEBINAR WITH NO REQUIREMENT TO SUBSCRIBE TO MY DAILY REPORT I WILL PRESENT THE WEBINAR PERSONALLY IN THREE MODULES EACH OF BETWEEN 1 1/2 - 2HOURS FOR JUST $69.90. PLEASE CLICK HERE TO REGISTER YOUR INTEREST.

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Monday, October 4, 2010

Nope… there’s still further to go on this Dollar decline but a reversal is still due

The market’s intent was confirmed on Friday. The Dollar has continued its slide and has foiled the hourly bullish divergences which in turn implied that the overall decline has further to go… It does also confirm that the intermediate pullback occurred earlier than expected from 1.3505 with the correction much briefer than the retracement I had been expecting. This means we are already in the final rally in EURUSD for this section of the larger rally which I had prior estimated to be around 1.40-1.42. Given the 1.3505-1.3386 pullback this lowers the final target by around 100-200 pips.

The decline in USDCHF is therefore back on target and also encourages the more bullish GBPUSD scenario I outlined on Friday. I doubt these targets will be met today but could by tomorrow – latest Wednesday. So the underlying risk remains Dollar bearish for now but do keep in mind that a deeper correction is due. I suspect the correction will last 2-3 weeks.

Now, USDJPY… I have been erring on the bearish side and at the moment this does still appear to be the case. I am also aware of the hourly & 4-hour bullish divergences that have developed which threaten a reversal higher. There is also the situation in EURJPY that needs to be brought into the equation also having reach 114.97 already. This has been the sort of minimum target area I have been outlining. However, as we have approached this target, while 4-hour momentum is still displaying a very mature (maybe too mature…) bearish divergence hourly momentum has broken its divergence and actually looks quite firm.

This does appear to imply that what we have seen is not the ultimate high. Given the upside targets in EURUSD the risk does still appear to be higher and is beginning to provide early indications that it could be far above the bullish targets I have been highlighting. If this is the case then we may well be talking about the 105.42 low as being a very significant low with the basic weekly trend threatening to reverse higher…

Whether this will avoid USDJPY reaching back to the 82.86 low is uncertain. However, it does mean that we should be open to a more direct resumption of gains so beware.

AUDUSD, probably also close to a high and I feel it will be lower rather than higher – but beware of any breach of the 0.8785-90 resistance. USDCAD is equally in a critical support area between 1.0134-76 that will determine the next larger move.

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. (+10 pips)

Have a profitable week.
Ian Copsey

I SHALL BE DISCONTINUING THE TECHNICAL TRADING WEBINAR OVER THE NEXT 2-3 MONTHS TO BEGIN PROVIDING ONLINE SEMINARS IN HARMONIC ELLIOTT WAVE. FOR THIS TERM I SHALL BE WILLING TO PROVIDE THE TECHNICAL TRADING WEBINAR WITH NO REQUIREMENT TO SUBSCRIBE TO MY DAILY REPORT I WILL PRESENT THE WEBINAR PERSONALLY IN THREE MODULES EACH OF BETWEEN 1 1/2 - 2HOURS FOR JUST $69.90. PLEASE CLICK HERE TO REGISTER YOUR INTEREST.

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Friday, October 1, 2010

Yesterday’s bedlam is pointing to a potentially lower peak and larger pullback…

Just as everything seemed to be developing so well the whole structure I was following disintegrated… Well, perhaps not the entire structure but I suspect that the final push higher I had been expecting to come at a later stage appears to have already developed and maybe ended. The larger picture remains the same but the difference I now see is that the correction should now be deeper and last a bit longer.

The deep, deep 4-hour Dollar bullish divergences are evident across three of the four majors plus AUDUSD. The exception is GBPUSD. The problem I am looking at right now is the apparent shortfall in the final projection higher in EURUSD. Yesterday’s high is close to a truncated projection but doesn’t really fill me with great confidence. In comparison I can see a full projection in USDCHF at yesterday’s low and also the AUDUSD high…

To add to the lack of confidence is yesterday’s move in GBPUSD. I had already pointed out that there were several potential corrective patterns open to this pair and the one it took was one of the scenarios which it enacted with perfection. However, it does imply a correction and not a final high. Therefore, for me to feel a lot better about all this I’d prefer to see yesterday’s 1.5669 low broken… Then all will be in concert with each other and then we can plan the larger pullback. Until then, the other two Europeans as well as the Aussie have not yet actually penetrated the last Dollar swing high in the decline so we can’t state that the trend has reversed until then…

Even the low in USDJPY wasn’t quite where I had expected any reaction and this is bugging me too. Again, there’s no break of a swing high to reverse the downtrend but there are both 4-hour and hourly bullish divergences that indicate the downward momentum is slowing sufficiently to warn of a reversal higher.

This is compounded by EURJPY which has continued its precarious rally but equally doesn’t look particularly confident. It is still capable of edging closer to the 114.73 high but it doesn’t look particularly happy with its current position.

Therefore, today’s analysis is going to be pretty neutral and cautious to reflect the precarious balance of the current position. The difference I see now is more that a larger correction than I had been looking for is due but the question is whether there can be any further attempts to push the Dollar lower can be made before that occurs. Thus be aware of the growing risk of reversal.

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 great weekend.
Ian Copsey

I SHALL BE DISCONTINUING THE TECHNICAL TRADING WEBINAR OVER THE NEXT 2-3 MONTHS TO BEGIN PROVIDING ONLINE SEMINARS IN HARMONIC ELLIOTT WAVE. FOR THIS TERM I SHALL BE WILLING TO PROVIDE THE TECHNICAL TRADING WEBINAR WITH NO REQUIREMENT TO SUBSCRIBE TO MY DAILY REPORT I WILL PRESENT THE WEBINAR PERSONALLY IN THREE MODULES EACH OF BETWEEN 1 1/2 - 2HOURS FOR JUST $69.90. PLEASE CLICK HERE TO REGISTER YOUR INTEREST.

FX-forecaster Trader Package now available at €20.00 pm
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