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 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

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