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HARMONIC ELLIOTT WAVE

Tuesday, November 30, 2010

The outlook seems a bit more mixed today…

Overall yesterday was quite a successful one with Dollar gains seen broadly across the board. Some targets were met and some still seem to have a little further to go. If I have all the moves correct then there certainly looks to be room for some rather disjointed developments today. EURUSD, while reaching a rough area which could see a larger reversal still seems to have further downside risk. However, while I called for the 1.5527-35 area in GBPUSD as a low yesterday, which hit reached to perfection, it implies a pullback higher…

So we have a dichotomy in terms of correlation between the Europeans. Well, I think we can take USDCHF out of that equation at the moment as it seems to prefer taking its own route at this time. That does leave a basically bullish GBPUSD view versus a bearish EURUSD… It’s never comforting to have this type of conflict and certainly it would be best to be aware of the risks overflowing from one to the other, but for now I do prefer these two taking separate routes.

USDJPY also managed to clamber its way higher. I’d like to think it could make another minor new high but momentum here is looking a bit strained. There are bearish divergences developing right from the hourly chart through to daily… The daily divergence would require a break below the 82.77 low but I think this is doubtful for now. I still prefer the scenario of seeing a pullback soon – and as I mentioned, preferably from a minor new high – but I feel there is still one more leg higher in it after this correction.

This tends to fit in with all the majors which do still seem to all require a new Dollar high either by late this week but probably into next.

AUDUSD fits that description too – as well as USDCAD… I do see signs that by the middle of next week approximately we should start to see the Dollar fall back lower and in what could be quite a deep retracement through to the end of the year.

For today, just keep an eye out on the key levels in EURUSD & GBPUSD given the apparent requirement for them to take separate routes versus the Dollar…

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. (+25 pips)

Good luck
Ian Copsey

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

Monday, November 29, 2010

We’re at make or break here … but momentum seems to favor further Dollar gains overall…

Dollar gains were seen as expected on Friday. When going through the weekly indicator review (http://www.fx-forecaster.com/files/Weekly_Review_Support_Resistance_26th_November_2010.pdf) the general impression I received was an overall Dollar bullish one. Momentum in the longer term charts seemed to provide a more bullish outlook. From a price perspective we have reached key resistance levels and I do feel that there is risk of a potential correction at least and just how far that moves will determine the larger trend. As I mentioned, this does seem to have a more Dollar bullish bias.

It’s not impossible that this correction is already complete and therefore we’re going to have to watch the next break closely. From what I can see, the early risk is higher but I’m not convinced at this point that we’ll see direct follow-through and suspect we could see a second attempt at a correction over the course of today. Either way, if I cam correct on the extension of Dollar gains then it should be quite a solid move lasting 2-3 days. Even then I don’t think it will provide the final high and there’ll be more to come either by late in the week or into next week.

I will detail the levels to watch out for that would indicate a reversal lower again within today’s analysis.

I did mention on Friday that we should at least see a deeper correction. If that is the case, then the reversal should come later today. However, having looked over the charts this morning and seeing the damage generated on Friday I am considering an alternative that would maintain more direct Dollar gains and probably to the mid 1.20’s EURUSD. Still, there are a few hurdles to overcome but the next few days should clarify the underlying structure.

USDJPY has extended gains and I’m beginning to consider slightly higher targets here also. It is moving more slowly and I don’t expect this to change but even with a more bullish view I don’t think this is going to generate any surge and potentially we’ll see this higher target reached as EURUSD reaches the mid 1.20’s target area. Bother should cause a deeper reaction with USDJPY most likely then to find a new historic low. That should keep EURUSD on the bearish side but looks as if the route will be a messy one.

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. (+30 pips)

Have a profitable week
Ian Copsey

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

Friday, November 26, 2010

Dollar gains should extend further today

Dollar gains were seen on Wednesday as expected followed by a respite yesterday which is only normal with the States effectively on a 4-day weekend. Wave development has clearly slowed and this has impacted on momentum which has pulled back from its highs and presented the potential for divergences to develop. The question is whether the market continues to have a fire in its belly to maintain the furious Euro bearishness. Many appear to have a glint in their eyes remembering the frenetic decline that begun from the 1.5143 high exactly one year ago and apparently have begun tapping on their calculators to work out just how much profit they can reel in with short Euro before the end of the year.

I remain hesitant to get too bullish on the Dollar at this point. Certainly, the structure I had been following in EURUSD has broken down and the temptation has been to follow the long line of lemmings in their quest to jump over the cliff edge. However, I can’t say at this point that they won’t find plentiful manna at the end of the drop. At the same time I view the monthly chart and while I can see a more bearish alternative, the early stages of the move appear to be too swift to slot into that monthly structure.

USDCHF has been a curious animal of late but it hasn’t yet reached my target retracement resistance – the highest is way up at 1.0444. Even reaching there it could well still be in a downtrend. GBPUSD… well, that’s messy but has reacted with less strength to the Dollar’s resurgence.

Then when I view EURUSD within a bearish structure it needs a deep pullback first to make it more viable, at least as far as I can see. It also has the capacity to descend into a month or so of range trading which again doesn’t seem too surprising given that year-end illiquidity is just around the corner. As I mentioned on Wednesday, while the situation within the EEC is pretty dire most of the world appears to be competing on the basis of how bad things really are…

To sum up my thoughts, I do feel that there is still room on the Dollar’s upside and this should still remain the prime focus over today and possibly a little into next week, but I feel that unless the situation suddenly explodes to the Dollar’s upside we should be wary of just how far this move can extend at this time…

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

Wednesday, November 24, 2010

Second step closer to a larger move…

Please note that with Thanksgiving holiday in the States tomorrow the next report will be on Friday


There is probably little need to say that yesterday’s moves have rocked the foundations of my larger Dollar bearish view. I do find this hard to contemplate as the implications are potentially for another rocky ride that we saw from the 1.5143 EURUSD peak… The problem I have is that while the monthly structure could well see a further rally the early stages of the decline in EURUSD would suggest that we have only just begun which would blow away the 1.1879 low with total arrogance.

Forgetting any current fundamental influence and considering price structure, I’m not sure I really find this quite fits. If I have any fundamental opinion it is really that the economies of all industrialized nations are in such a critically bad condition that every single currency should be sold… Clearly that doesn’t solve any problems in terms of forecasting…

For the moment momentum is clearly Dollar bullish. The wave structure is actually difficult to decipher but I’ll err on the side of momentum for now. I am still watching USDCHF with interest as I have always been expecting this to rally, albeit in a correction. There are alternative support areas in EURUSD and GBPUSD and while they don’t really seem to fit into any bearish structure they are still worth observing as a precaution.

What I am seeing through my indicators is a general threat to break weekly Dollar resistance levels that would spark a stronger correction to the Dollar’s losses and maybe total reversal. Given that we shall be entering a period of lower liquidity as we move into Christmas and New Year be aware that the risk could be for some choppy, but overall sustained moves…

For today, with a U.S. holiday tomorrow, there is continued risk of follow-through from yesterday’s rally but even from a structural point of view a correction should develop before long and this would tend to coincide with the lull in trading tomorrow.

To all those celebrating, a very happy Thanksgiving…

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. (+30 pips)

Good luck
Ian Copsey

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

Tuesday, November 23, 2010

One step closer to a larger move…

Finding Dollar buying levels finally turned out to be the right strategy although the rallies in EURUSD and GBPUSD were far stronger than I had anticipated. The break above 1.3775 frustrated but in reviewing I see a misjudgment in one leg of the move that had actually been a triangle in the EURUSD rally that forced a higher target. While the breach was not expected the end result is that structural progress remains on track. I still do not expect a new low in EURUSD. However, a new low in GBPUSD is more likely but should be the final stalling point for the larger rally to develop.

What is more confusing is the apparent refusal by USDCHF to respond with the vigor shown by its European buddies. This really does need to buck its ideas up pretty quick as if it moves much lower from current levels I’d have to begin doubting the final upside target… I actually prefer a neutral stance today just to watch what it does and which structure it will follow.

Now, what is of more interest is USDJPY and the crosses. While it didn’t really manage to get any higher than its early Monday morning stretch it has now developed into a more neutral balance in terms of structure. I have been on the sidelines here for some while, seeing an ambiguous structure building up that could spark a move in either direction. If this breaks higher then I feel it is more likely to be outright bullish. If it breaks lower then it has a choice now of further consolidation but more on the bearish side or an outright aggressive bearish structure.

Which will it be? Well, USDJPY is also still poised but seemingly with less upside risk and more downside. Even in the downside I can’t see it driving very far below the 79.70 historic low. On the assumption that EURUSD does indeed rally then the bearish consolidation scenario in the cross would appear more appropriate. If I’m wrong on EURUSD then the downside risk for the cross is substantial. My preference remains for a much stronger EURUSD and mildly weaker USDJPY which could see some losses depending on when USDJPY breaks down – but more likely an eventual recovery… What this love triangle closely…

On AUDUSD and USDCAD I am neutral today and waiting to see which way they break…

Overall, for today and tomorrow I feel we should be looking for Dollar selling levels…

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)

Good luck
Ian Copsey

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

Monday, November 22, 2010

Encouraging progress

It’s tempting fate but I feel the Dollar is beginning to show signs of what I have wanted to see. The recovery in EURUSD has continued while USDCHF has remained supported. It was the relationship between these two which had caused the confusion last week. What we do have now is an hourly bearish divergence in EURUSD while at the same time USDCHF remains above its recent corrective lows. GBPUSD has also seen a solid pullback from Friday’s high which I considered the end of a corrective rally.

This should provide at least 2 days of Dollar bullish pressure still within which I expect a pullback lower in EURUSD but not to new lows while gains against USDCHF and GBPUSD should see new corrective Dollar highs. It is the relative performance of these three which should be the prime focus of the analysis ahead of Thursday’s Thanksgiving holiday. Assuming all goes to expectations this should eventually result in resumption of the weekly Dollar downtrend.

I should point out EURJPY also which has pushed higher nicely. I’m not sure that it should get much further, if at all, before turning in a correction. However, we have to acknowledge that it is still in the recent range and until then some caution is necessary. However, the way things are developing it is beginning to show modestly positive signs of continued strength.

Indeed, caution is advised as the rally in USDJPY has slowed considerably and to areas where a corrective peak can develop. In the slightly larger picture (over the next 2-3 days) we need USDJPY to remain moving in a modest upward direction else any sharp losses would maintain the broad sideways consolidation in the cross.

AUDUSD – my preference is for more losses here but I feel we are nearing a more substantial corrective low that should spur price back into the weekly uptrend. USDCAD – lower for today I think, probably in the larger picture too, but this has been in a range for so many months it’ll be best to keep a balanced view on this one.

Therefore, the main message today is to look for Dollar buying levels…

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. (+105 pips)

Have a profitable week
Ian Copsey

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

Friday, November 19, 2010

Conflicts

This week has not been a good one. It seems I have been lagging the market rather than leading and that makes me glad the weekend has arrived. Yesterday’s Dollar losses were a risk I could see from the bullish divergences in EURUSD but those in USDCHF and GBPUSD were clearly not anticipated. Taking a step back, in many ways, as I pointed out, the 1.3447 EURUSD low is very much in line with my larger daily/weekly picture of strength. However, what clearly spoofed me yesterday was the fact that we had not seen a strong enough rally in USDCHF to satisfy a minimum daily correction there… The sharp push higher in the latter by the end of the day has actually confirmed that. As for GBPUSD – at this point I’m treating it as a correction with potential downside risk still to come. Whether this makes new lows or remains in a consolidation has yet to be seen but I do not rule this out.

It does look as if EURUSD is approaching a peak in the recovery so it actually suits the Dollar bullish picture expected in the other two Europeans so today should be mostly Dollar bullish. We shall have to see how this pans out as we get into next week as the ideal will be for EURUSD to generate a correction only while the other two risks minor new Dollar highs. If all this occurs next week then I feel the weekly Dollar bearish trend can continue. It could end up as quite a close call but like a stubborn mule I still see Dollar cycles as bearish.

USDJPY spent much of the day in consolidation but ended up at new highs. We are beginning to get bearish divergences here also so we should be aware of the downside risk that could emerge at any time. I do still see risk of another push higher, but the more this happens with sluggish momentum the stronger the risk of reversal lower.

Interestingly the combination of EURUSD and USDJPY has seen the cross rally quite constructively and has begun to resurrect the bullish preference I have had. However, it’s still early days and clearly we’re within the larger range. I can’t see excessive gains today and the proof of the pudding should come over the early days of next week. If I am correct in my bullish EURUSD preference and USDJPY remains sluggish on the downside the environment for further gains is most definitely possible.

So, today look for the final remnants of yesterday’s moves to die out and expect Dollar gains 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. (+70 pips)

Have a great weekend
Ian Copsey

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

Thursday, November 18, 2010

Slow correction but the evidence still appears to point to a higher Dollar still

I was quite encouraged with yesterday’s move, apart from the fact the correction took all day to reach the retracement targets, but with all but USDJPY of the Dollar-currency pairs stalling at the right areas it provides greater confidence in the overall structures. Therefore the basic assumption of further gains today does appear to be valid. If not, we have great break levels…

Having taken a longer look at the daily charts all round yesterday I am coming to the conclusion that this may yet still be just a deeper retracement within the larger weekly Dollar downtrend. There are a few technical reasons for this in terms of price development and if I can venture into the realms of Elliott Wave the issue for me is alternation. For non-Elliott Wavers this is an observation, though not cast iron, which suggests that within the 2 corrective waves between 3 directional waves there should be one that is deeper than the other.

Looking at the hourly decline in EURUSD the retracements have all been shallow which tends to push the risk towards a corrective structure. Equally, looking at the daily decline from 1.1730 USDCHF the same is the case – but the move higher now appears to be a deeper pullback within the second corrective structure. Potentially another indication is yesterday’s failure for USDJPY to push above the 83.58 high, this being a corrective retracement area. However, this still may not be the final corrective high.

So the underlying message for now is basically the same as yesterday. Continue to favor the Dollar upside for now. There does seem to be further to go but I hazard a guess this could be quite choppy. Keep yesterday’s Dollar corrective lows, or around there, as the points that could generate resumption of Dollar losses. At this point though I still feel short term momentum remains higher.

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. (+45 pips)

Good luck
Ian Copsey

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

Wednesday, November 17, 2010

Fog on the road ahead… but the wheels are still pushing the Dollar higher…

That’s settled then… 1.3557-70 EURUSD has broken, USDCHF has taken out (marginally) the 0.9970 high and GBPUSD has fallen below 1.5950… I can see bullish divergences in EURUSD but the picture is not the same in USDCHF and GBPUSD and therefore the stronger risk remains Dollar bullish.

Do I see this as a clear and definite signal for sustainable Dollar gains? Probably… However, while I took a long look at the daily charts and the structure of what we have seen so far I still cannot recognize the structure. From the 0.4281 high the decline in EURUSD has been too direct so far, corrections limited, and to an extent that suggests one of two things – either this is still a correction since corrections within corrections can be brief, or we need a deeper pullback at some point to balance out the structural development in a directional move.

However, that aside, momentum is Dollar bullish. It doesn’t rule out a correction but probably means they should be brief once again. For today I’ll concentrate on some areas which I feel have potential to generate a correction and then make a judgment from the reaction. At this point too I’m not going to totally abandon the Dollar bearishness I have preferred but admit it is more as a precaution than from any strong view.

If I have any relatively common view, then it is for a brief pullback to yesterday’s moves and then an extension. From these points I hope to be able to judge the structure and generate targets. However, I do feel over the next day or two we’ll be seeing a slightly deeper pullback.

I have found the wave development exceptionally complicated today and therefore please take care at all times. Today is one of those days where I don’t have enormous confidence in the support & resistance and therefore trade set ups should be utilized.

Underlying risk for today is therefore Dollar bullish and this is the side that should be preferred.

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

Good luck
Ian Copsey

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

Tuesday, November 16, 2010

Monday blues…

I wish I could start the week again… Yesterday didn’t see much that went to plan – just USDJPY really and maybe USDCHF. The Europeans were lethargic and mainly driven by a modestly bullish Dollar that caused a deeper correction in GBPUSD, saw USDCHF advance into the resistance area expected but EURUSD… a drop below Friday’s low… exactly what I had not wanted to see occur…

So, as I wrote yesterday, does this mean the Dollar downtrend has completely reversed? Well, it has to be seriously considered… From a structural point of view the decline from 1.4281 EURUSD is now looking strained in terms of what I would expect. However, what has occurred this morning is a slowing in momentum that has allowed hourly momentum to develop a bullish divergence while the 4-hour divergence remains intact… Equally, USDCHF is now seeing bearish divergences as does USDJPY…

The additional confusion is that USDCHF has developed these divergences at levels that suggest it to be in a potential sideways consolidation. GBPUSD has gone into a neutral pattern. Therefore, I would rather allow for myself to have made a possible error in the structure in EURUSD but take a more neutral view until the mess is sorted out. Indeed, in terms of the correction in EURUSD it is still above a Fibonacci support level at 1.3557… It will also therefore mean that we are going to have to look for break levels which always add a larger risk of being caught on pullbacks.

Thus, today the analysis will be rather defensive but given the circumstances it is probably the best option. I don’t think we’re going to get a sharp resumption of Dollar losses today but hopefully we should get more clues from the developments seen.

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. (+90 pips)

Good luck
Ian Copsey

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

Monday, November 15, 2010

Basically I look for Dollar losses but risks are for mixed bag today…

For me EURUSD is basically the crucial currency pair to watch. Its low on Friday was sufficiently close to the 1.3577 support for me to call this a successfully completed pullback. It bounced nicely from here and if we are to see my larger bullish structure to be fulfilled this low should not be broken. This level should not be under-estimated as breach will threaten to break the entire structure I have been following for the past 3 months…

Therefore, we should be watching for gains to develop which in the early stages could take on a structure that would fit into either bullish or bearish medium term patterns. This means there is still a lot of work to be done to watch how the expected recovery develops. GBPUSD appears to have a more bullish outlook which supports the idea that we should be seeing Dollar losses. The pair that holds more confusion is USDCHF where I still see potential for gains. This is definitely more of a conundrum and may even subside into a sideways consolidation…

Friday’s pullback was to the deepest I had expected. Either this has to start powering higher or the rally will soon peter out. The way I see it at the moment is for gains to be seen initially but then we’re going to have to be aware of the pivotal area that divides the stronger bullish rally and a possible end to the correction from 80.23… There’s not too much assistance offered by EURJPY. It bounced from the higher support on Friday, and stronger than I had expected but this actually added an unknown ingredient that could still see partial follow-through higher only to reverse sharply lower. In the daily picture the cross is still poised between two scenarios. I do feel this may well point to what will happen in general to the Dollar but this current hurdle needs first to be navigated.

The next problem is that the Aussie is looking a bit soggy at the edges and I’m not particularly keen on a bullish structure. This adds to the inconclusiveness of the general Dollar outcome. USDCAD seems more to point to a short term consolidation…

So for today, with certain barriers to overcome, I feel we should see a Dollar negative day but be aware of the key Dollar support areas and Friday’s low in EURUSD…

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. (+230 pips)

Have a profitable week
Ian Copsey

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

Friday, November 12, 2010

I’m not 100% sure that I like what happened yesterday

Wednesday left me feeling the Dollar had performed basically as expected. The drop to 1.3627 EURUSD is pretty much in line with my targets. The direct recovery in GBPUSD from 1.5952 was not quite what was expected but could be seen as more in line with the bullish stance. The correction in USDCHF which extended to new highs was a possibility which I had tended to feel was unlikely. Moreover it has produced a potentially bullish structure.

What is a little more concerning is that bearish momentum in EURUSD has become stronger with the hourly bullish divergences breaking and even as I write I see that it has broken below my lower target at 1.3622… That doesn’t really fill me with confidence.

What is more, the rally in USDJPY has developed in a manner that also looks quite bullish… but EURJPY tends to provide me with a more bearish feel… I can’t see this dropping through the floor right now but does risk further losses while the bullish expectations in USDJPY do appear to face resistance not too much higher than current levels…

If the outcome develops against my original view then we are facing a completely alternative structure, one mildly Dollar bullish in the near to medium term but if this turns more significantly higher then the upside risk does rise considerably. By that I mean there is chance we could drop right back down to 1.1879 again… later below. I’ll take this step by step as we are in the twilight zone of the twist in structure but raising this now should warn us to take care until stronger signals are generated.

While I do take no notice of fundamental releases in terms of my forecasting it is folly not to be aware of the G20 meeting underway and as such could be a short term irritant or a more significant catalyst with the end result of lots of politicians bitching and positioning themselves to retain a weak currency. Thus, until the clash of handbags and scratching of eyes subsides it is clearly appropriate to take a neutral view given the potential breakdown of the short term structure…

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

Have a great weekend
Ian Copsey

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

Wednesday, November 10, 2010

We should see the end of this Dollar pullback today

Please note that tomorrow is Veteran’s Day Holiday in the U.S. so the next report will be on Friday


Yesterday’s price movement provided some good clues that should provide us with a conclusion to the Dollar bullish correction which started last Friday. I can’t say in the longer term picture I’m brimming with confidence since the Dollar bearish targets do not appear to be particularly synchronized, at least at this stage. However, there is a long way to go still and at this point the resumption of the larger downtrend some appear imminent.

However, focus today must be short term initially but with the prospect of being able to establish some Dollar short positions that could prove to be quite healthy.

The very start of today, around the NY twilight zone before Asia had fully opened their eyes saw some Dollar losses. This should generate a correction in Asia but probably by early European time the final Dollar highs seem likely. Perhaps this can be delayed a little this outlook does look basically like being the general development. Certainly, the Europeans appear to be in concert. GBPUSD concerns a little as the correction has been modestly deep and momentum not looking exactly ready for a bounce so we have to play that one a bit more carefully.

Perhaps the bigger surprise was USDJPY which stormed higher at the end of the day to retest the 81.97 corrective high. This one has obviously been a difficult one to follow due to the general movements divided into minutia which makes wave relationships tough. However, while I can see a pullback in Asia this actually looks bullish also… Given the propensity to move sharply and then subside into narrow ranges I don’t want to get too ahead of myself, but this does appear to have the potential for further gains.

Again, where the move may come once again is in the cross. This too has come to a critical juncture but one where the downside looks limited – for now at least – and a correction due from new lows that should be seen today. It seems logical that a pullback lower in USDJPY and the anticipated extension in EURUSD could provoke this follow-through but a combination of them both rallying could generate a solid pullback – so take care.

The Aussie looks like being close to a corrective target and ready for a push back higher. USDCAD…maybe this can rally too… I’d still play this one with caution though…

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. (+205 pips)

Good luck
Ian Copsey

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

Tuesday, November 9, 2010

More of the same… or resumption of Dollar losses?

Yesterday provided a few more clues. At least we can almost certainly put the Euro triangle to rest as a probable figment of our imagination. I say probable since while the triangle high was penetrated it is not impossible for a retracement to mildly penetrate the boundaries. It is probably this which is the source of any uncertainty today. There is an hourly bullish divergence so the potential for the pullback to be complete is most definitely present.

The key is more in what the rest of the Dollar currency pairs are suggesting… To be honest there is no definite answer here. Very clearly the Euro outstripped all other currency pairs to leave them looking more as if they have suffered a mild correction. There is even some potential for this correction to deepen just a little more and this is more my preference. The other issue to face is that EURUSD has a lot farther to move to reach its target compared to the other two Europeans… I have to admit this is something that remains nagging in the back of my head…

So we’ll have to start today with continued caution and try and recognize the flow, where the market has more weakness. It has started with the Euro seeing some losses and where this next stalls will be critical.

Another clue to look for is how EURJPY develops. It saw quite a solid pullback on the tail of the bearish Euro yesterday and has retraced a fair part of the rally from the 111.51 low. This really does appear to be at a critical juncture with conflicting daily & weekly indications. I have struggled with this for some time, seeing the potential for a move to 100.40 but finding the underlying Dollar weakness against the Euro to be a dampening factor for such an outcome.

Thus, while there are a few alternative structures here, unless USDJPY resumes a more aggressive decline, I’m not yet convinced that the cross is going to die at this point…

The Aussie looks a little range bound. USDCAD is beginning to display a resistance to the recent losses…

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. (+45 pips)

Good luck
Ian Copsey

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

Monday, November 8, 2010

Off track…

Friday wasn’t meant to happen… It has cast a lot of doubts in my mind and also a lot of conflicting structures. The break of support in EURUSD and the depth of the decline really made the bullish structure look exceptionally doubtful. The immediate implication implies a decline all the way back to the 1.3696 low and a bit beyond… Cripes…

But before I went too far it should also be noted that the 61.8% pullback of the 1.3863-1.4281 rally falls exactly at Friday’s low at 1.4023. Therefore to confirm the structure the immediate thought was to check against USDCHF and GBPUSD… I mentioned last week that I found it hard to identify a decent structure in USDCHF… and a corrective one appears a better bet. However, conversely it is tougher to achieve a bearish GBPUSD structure.

So I ended in a Catch 22 situation… Next stop in the checks was the overall momentum position. Here I found it hard to see any Dollar bullish divergences that would suggest that a total recycling is imminent. Well, they don’t always occur so it’s not a conclusive solution…

So the end result of these checks remain inconclusive but until the broader Dollar swing highs are broken I have to assume we are still on course for losses… but keep the doubts in the back of my mind to try and identify just where the bearish move breaks down. Therefore, take the early stages of the day with care and note the key areas that would sway price one way or the other…

Even USDJPY proved slightly stronger than expected. In some ways I am less averse to some Dollar strength here but this entire structure has been so erratic that the structure here is not straight forward either. It won’t take too much to bring it back into the recent range which is probably the safer assumption. However, do be aware that any break above 81.47-57 would push it higher.

That’s not such a wayward possibility as EURJPY also deviated from expectations on Friday. However, this could well provide a more bullish outlook that would suit both higher EURUSD and USDJPY… Again, break levels for a move back lower are not that far away but until Friday’s low breaks the upside does still seem to hold sway…

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. (+40 pips)

Have a profitable week
Ian Copsey

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

Friday, November 5, 2010

On track…

I needn’t have considered the possibility of extended consolidation yesterday. The Dollar has taken the more direct route and the downtrend is back on track. There’s still a long way to go in the larger picture but I suspect we’ll reach the half way mark by the middle of next week, just in time for the U.S. bank holiday on Thursday.

For today there is still further to go in the current leg but a correction will be due probably by the end of today which should last through to Monday at least to set up the final leg higher to the half-way mark as mentioned above. This basic pattern extends across all Dollar currency pairs with the exception of USDJPY it seems.

Indeed, USDJPY did falter and was dragged lower yesterday. I do remain bearish here though the speed of the decline I find a little uncertain. It’s possible we’re still in a sideways consolidation here but the pace of moves remains staggeringly complicated with horrendous microscopic adjustments interspersed with moments of sheer panic and terror that must be similar to how President Obama feels…

Many of you will know that I have been very, very bearish for a long time and that will not change for another 2 years. However, the structure of the decline has been rather a nightmare. Most comments I see are generally on the lines of: “how can USDJPY go down as the exchange rate is already killing exports.” It does seem to me that more emphasis is on the crosses as the Dollar is generally weak across the board.

I can only point to EURJPY as a proxy at this point as it seems most JPY plays are through the crosses these days. Yesterday saw gains extend in the cross but I don’t think this is complete yet. As with the expectation of another rally in EURUSD the prospect is the same for the cross rate. However, it does also seem to be coming to a point where a deeper correction is due and that is when I feel there may be room for USDJPY to finally pluck up the courage to retest the April 1995 historic low.

So the emphasis today is on the Dollar’s downside across the entire range of currencies, the potential for USDJPY to be the exception, before a correction higher by the end of the day and probably extending into Monday.

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. (+65 pips)

Have a great weekend
Ian Copsey

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

Thursday, November 4, 2010

The downtrend appears confirmed to me – but will this follow-through directly?

I mentioned yesterday that since we are in the early stages of this next leg of the Dollar downtrend there would be risk of a few “wriggles.” Well they certainly happened right at the end of New York trading. I am not completely convinced that they are over although and extension of this corrective price activity should not be with quite such frenetic panic as was seen a few hours ago.

Overall I found the moves very encouraging and even the “wriggles” fit very well into the entire structure. The only question in my mind is whether the downtrend will extend directly or see a recycling… However, the base waves of the new extension are basically set and do seem to slot in nicely into the sort of projections I am anticipating. As a market for the entire move the triangle target in EURUSD is around 1.4425-75 and that is probably the next intermediate target to go for.

Even GBPUSD finally made its move, a little tardy, but constructive never-the-less while USDCHF has been making steady downward progress although perhaps with less enthusiasm. The Swissie does raise some doubts due to this dragging of its heels but progress has been in the right direction.

More of interest perhaps, is the rally in USDJPY… It surpassed my expectations and brings the pullback to a level where it actually seems to be demanding more. It’s not impossible as EURJPY has also shot higher in quite an impressive display and is demanding more of the same. Now whether this implies that USDJPY will go higher, or EURUSD... or both… is one of those conundrums which needs to be watched with care. However, the 81.97 high in USDJPY is unlikely to be breached on any first attempt and therefore I doubt we’ll see such a firm display today. The more important issue is whether the correction turns into a consolidation that keeps the market on the quieter side today…

AUDUSD is looking extremely perky but does have some signs of bearish divergences. I don’t think this is going to cause a deep pullback though it does add to the potential for a day of consolidation. USDCAD does look bearish overall…

In summary, the underlying threat is for more Dollar losses and that should be always kept in mind. We just have to watch for signs of this emerging or whether the day turns flat with the market potentially suffering from the late “wriggles.”

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

Good luck
Ian Copsey

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

Wednesday, November 3, 2010

Done and dusted…

It seems I needn’t have been concerned about the rally in USDCHF… Yesterday’s Dollar peaks came early in the day while I was writing the report with the final pullback in the EURUSD triangle being even shallower than I had anticipated. The rest of the day was Dollar negative with EURUSD penetrating the triangle high while USDCHF dipped below the channel low to confirm resumption of the Dollar downtrend. The only European currency pair that lagged was GBPUSD which hasn’t yet made a new high.

So, that should set the Dollar back on a downward path which leaves us to fathom out its path in this decline that is likely to take the market by surprise again. However, we’re still in the early stages of this move and there’s still room for a few wriggles so I have doubts that we’ll see an immediately firm rally. During this time there should probably be room for retests of the EUR triangle high and CHF (broken) channel low. Therefore care is still to be exercised before this turns into a clean Dollar decline. I should add that over the next week or two as we approach the triangle target in EURUSD and the 0.9462 USDCHF low there is a risk of a moderately strong reaction/correction. This suggests we’ll not quite see the runaway move as was seen in the approach to 1.4157 and 0.9462 respectively.

Just a word on GBPUSD… I was a little disappointed this didn’t join in with the overall Dollar weakness and this does leave open the risk of a slightly deeper correction today. However, overall I remain bullish here but probably not to the extent of the Euro.

USDJPY… still no break lower. I’m sure it’ll come but for the moment we’re going to have to play a waiting game to see how this correction pans out. There’s still risk of a slightly longer sideways consolidation while swing lows keep rising. However, any early drop would open up a test of the 79.70 historic low. I was encouraged by the strength in EURJPY also and feel there is probably a little more to go on the upside before a correction. However, if we do see a higher high today then the ball may well be switching to the bullish court. It won’t occur without a decent pullback but the potential is there which implies we could still see limited losses in USDJPY.

AUDUSD… very much in a similar position to the Europeans. USDCAD looks pretty bearish to me…

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

Good luck
Ian Copsey

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

Tuesday, November 2, 2010

Almost there..?

In the larger picture things have gone exactly to plan. Yesterday’s highs in both EURUSD and GBPUSD were just about perfect so if this whole structure does as I feel it should then we’re in the last leg of the Dollar correction…

There are just a couple of slight hurdles I see that cause me a touch of concern so it is worth mentioning these. The first is that EURUSD looks very close to the minimum pullback – well, what I feel is the probable final low. However, the correction from yesterday’s GBPUSD high has not really made much downside impact and USDCHF appears to be hovering in the twilight zone, apparently heading higher but stretching the limits of its own correction.

To be honest, GBPUSD is in a position where a deep correction is not a necessity and I’m open to a fairly swift resumption of the upside. However, in USDCHF there appears to be more latitude for additional highs and perhaps of a degree that, if matched by EURUSD, would cause the latter a few problems. So let’s just say I am still very much bearish for the Dollar and I feel that probably we’ll see it resume its decline by the end of today but probably the start of this move could be quite choppy. Perhaps in all this possible volatility it will allow the Europeans to all be satisfied…

USDJPY… Moves like we saw yesterday don’t really help too much when identifying wave structures. However, there seems to be two alternatives; the first is extended consolidation and the other bearish… Where I have more uncertainty is in EURJPY… it just refuses to develop a more aggressive bearish structure but has declined never-the-less… It actually looks more bullish to me at this moment and perhaps that is a reflection of a consolidating USDJPY with a rallying EURUSD. Certainly, this triangle relationship needs to be observed with care until there is a more definite break.

AUDUSD… can resume the uptrend at any point but does seem to have a risk of a slightly deeper correction. However, the main risk is higher now. USDCAD completed a downward structure yesterday so looks as if we shall see a reversal higher…

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

Good luck
Ian Copsey

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

Monday, November 1, 2010

One step back, but one step forward again…

I made a misjudgment on Friday in EURUSD it seems… What I had thought should be a direct attack on the current targets proved incorrect and Friday saw the 1.3800-15 EURUSD support hold and generate follow-through to a new high this morning. So the cycle seems just a touch slower than I had thought and basically the outlook I described on Friday should remain intact today.

Indeed, as I went through the weekly review the underlying long term view, which had seemed at risk of seeing the Dollar bullish correction deepen the previous week, seems to have been foiled and brought the momentum picture this week to look as if the correction is complete – or just about complete. From what I can see the Dollar should resume its downtrend by the end of tomorrow at the earliest and more likely into Wednesday. Thus, be prepared for some further range trading in the meantime.

Where I have the greatest doubts and confusion is in USDJPY right now. The basic long term view is bearish. The short – medium term view is somewhat mixed. I can see daily & 4 hour bullish divergences developing though, of course, these mean nothing if a swing high is not breached. I have much lower targets but not really the structure that support follow-through right now. However, it would be hard to see the Dollar resume its decline against the Europeans but rally against the Yen at this point and therefore we must be prepared for a retest of the 79.70 historic low. There are supports just above and just below this level also so take care attempting any shorts expecting the JPY world to cave in.

This therefore should keep EURJPY in its current screwed up and messy consolidation. The cross has really developed in a mind-numbing series of erratic and whippy moves that only look like continuing right now…

AUDUSD looks like it’s setting it self up for a run higher but probably needs a pullback before it can push through more strongly. USDCAD … I’d rather watch but feel that a pullback higher is due…

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. (+0 pips)

Have a profitable week
Ian Copsey

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