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HARMONIC ELLIOTT WAVE

Thursday, December 23, 2010

While there is still risk of a correction the current trend should continue through New Year

Please note The Daily Forecaster will return on the 3rd January


These past few days have sure been testing. Corrections have never really been able to develop to their full and each day we have seen the directional moves extend. It has been very choppy and I don’t see an end to this today or tomorrow. However, the main Dollar bullish expectations for EURUSD and GBPUSD remain on track – even if it’s a meandering path. Rather obtusely USDCHF and USDJPY have taken exactly the opposite path, seeing the Dollar lose ground bit by bit although I feel these are probably close to a decent bounce.

If I extend my horizon through to the end of the year I feel the European trends will likely extend further although by early next year a correction will no doubt be due. I am still aware of a slightly duality for USDJPY but the 82.63-93 area seems to be fairly important. I’ll not get too bearish until this area breaks.

The anticipated decline in EURUSD should enable EURJPY to retain its general decline and this should see quite some losses. That is the one doubt I have about USDJPY as the anticipated eventual target is closer to 100. It may be a case of timing and how deep retracements develop but it does suggest we do have to be aware of the critical USDJPY support.

AUDUSD may threaten a period of consolidation even if the current rally has been sustained even in the face of bearish divergences. This one’s a tough call but I find it hard to see a constructive bullish structure here. USDCAD… It’s still in the larger range that has been around for around 9 months now. Perhaps it’s not rocket science but we need a break of the 0.9929-77 lows to trigger losses and until then the chance of further consolidation remains. However, do watch out, as if we see declines today the break lower could become a reality.

May I wish everyone a splendid festive season and happiness and health for the coming year.

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)

Ian Copsey

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

Wednesday, December 22, 2010

If the Dollar is going to rally this side of Xmas then today’s the day … else wait till next week

Please note The Daily Forecaster will take a break from the 24th December and return on the 3rd January


Yesterday was a strange day, but that’s saying very little given the time of year. Maybe too many traders were more interested in first lunar eclipse on the winter solstice in 456 years… I could accept that if 456 had been a Fibonacci number... but it’s not… More likely they were more interested in a quiet period ahead of a few days of merriment.

The Dollar neither made minor early gains nor retraced as far as I had expected, but ended the day with GBPUSD, EURUSD and EURJPY sitting close to the more aggressive break lower I had been anticipating. Will the market have the energy to commit to the stronger follow-through today? Maybe… maybe not. Most probably they’d prefer not to have the hassle of being caught in the game of pass-the-parcel where the person left holding the parcel incurs a loss.

However, the risk is there and with just today and tomorrow left offering a semblance of almost normal trading conditions if the right levels are broken then those three currency pairs will be sent tumbling. If those levels hold – and there are signs that they will – then all we’re going to see is a total recycling of the correction that could take us into the long weekend. However, once the weekend is over the Dollar should extend its gains then.

Just a word on USDJPY… It’s struggling but just about clinging onto a push back higher after failing at the 83.50 support I pointed out yesterday. It needs to make further gains today to keep on that bullish track but I doubt we’ll see any fireworks … or red moon… today. Certainly USDCAD looks like it will extend its consolidation today but that does seem to be due a subsequent push higher. AUDUSD looks as if it will subside into a sideways consolidation also.

Thus the stronger risk is for continued subdued trading – but just watch out for the key Dollar resistance 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. (+40 pips)

Good luck
Ian Copsey

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

Tuesday, December 21, 2010

A little bit more of the same…

Please note The Daily Forecaster will take a break from the 24th December and return on the 3rd January

The week did start with early corrective price action and saw losses in GBPUSD and EURUSD but not with the aggression I had expected and it seems as if the market has slowed to a crawl. I guess we can’t be too surprised with that since the market needs a catalyst to prod them from the pre-Xmas preference for slumber. Having gone through the charts I tend to feel there is risk of a similar sort of day.

GBPUSD didn’t reach its target and from yesterday’s high I have problems in identifying corresponding targets. I don’t think USDCHF has quite finished its pullback either. To top it all EURJPY, while it did decline, has done so in a manner which looks like it has made a slightly stronger decline in the current sector of the structure. This does look like extending a little further but a deeper pullback will then be due. Given USDJPY has entered into its own time warp the implication I see in general is for EURUSD to probably dip a little to generate the anticipated extension in EURJPY but then see a correction higher. That seems to suit all the currency pairs.

I should add a little more on USDJPY. The upside targets also haven’t been seen in the larger picture and I still have a preference to see one more rally. However, it appears to have dipped too far for this to occur directly and it has left me with an impression that we may see a larger consolidation develop. This could still see losses but most likely in an erratic manner. I think we can write this one off until next week.

It’ll mean just a bit more patience for the EURUSD & GBPUSD downside – USDCHF upside – to develop but I still have a feeling we shall see it this side of the Xmas break and could be quite aggressive.

AUDUSD has also begun to look more balanced. I’m open to both sides of the market – probably favor consolidation more. USDCAD is approaching key resistance that should highlight extension or reversal… Take care with this loonie…

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. (+45 pips)

Good luck
Ian Copsey

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

Monday, December 20, 2010

Friday destroyed any lingering thoughts of Dollar losses…

Please note The Daily Forecaster will take a break from the 24th December and return on the 3rd January


It seems I clung on the possibility of Dollar losses extending into this week just a bit too long… Friday put paid to those ideas very swiftly… The alternative does appear to be a strong potential for the gains seen towards the end of last week to extend and in a manner that appears to imply quite an aggressive follow-through over the next 2-3 days of some 150-200 points in the EURUSD and GBPUSD. I can’t see any reason for USDCHF not to follow suit but I do find this less clear with its structure…

However, before that follow-through there does appear to be a need for a pullback and that should dominate for the first half of today at least and may stretch into early NY trading. Once this correction has been seen the Dollar gains can emerge.

The collapse in EURUSD provoked the anticipated losses in EURJPY and equally this is going to be affected over the next few days also. It has a similar directional expectation as EURUSD has – a mild correction followed by losses. The initial losses should be limited but by tomorrow or Wednesday I suspect we’ll have seen a move closer to the 108.33 low. Ideally I’d prefer something a little more aggressive but this will probably require USDJPY to join in on the downside. I’m not entirely clear on USDJPY however, very much split between continuation of the upside and a recycling of the correction back to 82.83… The last few days of last week saw the rally begin to labor to leave it poised between the two scenarios. That’s something we’re going to have to watch and be aware of break levels.

With 4 ½ days of trading left the risk is that we essentially will probably have only 3 days of anything resembling normal trading conditions. It is just a resemblance but it is probably the illiquidity that could cause the anticipated sharp losses in EURUSD and GBPUSD.

Thin markets = more volatility so take care…

Today’s free analysis is for EURUSD and can be found on http://www.fx-forecaster.com/DailyForecast.html along with yesterday’s Trader Pack
age 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, December 17, 2010

Today may well be similar to yesterday

Yesterday went pretty much to plan, perhaps a bit slower than I had anticipated, but overall we saw the Dollar manage a pullback. As the headline says, today could be similar. I do feel we’ll see some Dollar losses against the Europeans but I’m not expecting these to be sustainable which will leave us still with the fine balance between stronger gains or a stronger reversal lower.

I do admit that I still have the stubborn preference for the Dollar to return to the downside, perhaps by the end of the day or over next week. I’ll still watch to see what happens today but the signs I see tend to support that view. Things can morph of course and the underlying momentum picture is still Dollar bullish which is why I doubt we’ll see any early resolution to the balance.

As a broad outline, to try and judge how the two alternatives may develop, the expectation I have is for the first part of today to be Dollar bearish but not excessively. It will be how it then reacts from those lows which will determine the final outcome. A ragged and unconvincing Dollar rally that fails below yesterday’s highs, probably lasting for the rest of the day will increase the risk of a reversal back lower for losses into the last week of the year. If the reaction is stronger then any breach of those highs will send it on an extension lower but don’t expect any breach of the 1.2968 low just yet…

Another development that pushes more to the Dollar bear camp is USDJPY. Its failure to overcome the 84.50 high and the deeper retracement appears to reflect the correction which I had expected from the 84.80 area. That being the case, it will imply a much lower final target and a much sooner reversal lower. That seems to be backed up by EURJPY which has crept lower and seems poised after the 112.18 high to extend losses. The cross can still wriggle & jiggle a little before it goes down but I can’t see this lasting for too long… Thus beware, this final high in USDJPY does look terminal…

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. (+50 pips)

Have a great weekend
Ian Copsey

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

Thursday, December 16, 2010

It seems to me that we are at a critical point between bullish & bearish…

Well, that wasn’t choppy at all… The declines in GBPUSD and EURUSD were much deeper than I had been expecting and have come tantalizingly close to confirming a resumption of the underlying Dollar uptrend. It would be very easy to assume that this was the case… perhaps it is… but after a lot of frowning, burrowing of brows and measuring I’m not really convinced this is the case…

We should remember that this is December. I have noted a higher than normal instances of extreme projections that are not so common. This appears to be a result of the lack of liquidity forcing the game of pass-the-position to accelerate with limited corrections.

Let’s just say that I feel it would be best not to make a final decision. At the very least I feel that a pullback is due from those declines and the key will be the critical areas that would confirm extension of Dollar gains… or on breach would cause the Dollar to head lower again.

For other currency pairs such as AUDUSD, USDCAD and indeed, USDJPY the reactions have been far more conservative and actually tend to fit better with a continuation of their respective trends. In particular USDJPY is working exceptionally well with the current move higher and brings with it more confidence with the structure. For that reason I shall err on the side of the Dollar resuming losses but will highlight the areas we need watch for that could throw back the idea in my face.

Thus, keep your minds open to identify what is happening and remember Xmas is just 6 ½ trading days away…

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

Wednesday, December 15, 2010

Today looks like a return to the messy stage again…

The outlook for marginal new Dollar losses proved correct although failed to reach the target levels in general. Never-the-less the structure seems a little more straightforward but given we’re probably into a correction we’ll have to be aware of the type of market we saw last week. If I am to state a preference here I have a feeling that the correction may not last quite as long as last week which means we’ll have to be on the lookout for Dollar losses to resume at some point.

I mentioned yesterday the Dollar cycle lows by earliest next week – possibly stretching into the last week of the month. Well, it looks like the length of this correction may well dictate when the final low will come and for Dollar gains to resume. We must keep in mind that we only have 5-6 trading days left ahead of Xmas and effectively 3 days after Xmas. It is quite normal for the market to resume a more directional bias in the last week of the year so the rough timing of these cycles does appear appropriate.

After yesterday’s dip this should give USDJPY the opportunity to push above 85.00 over the coming days in what should be the final leg higher. In particular this implies quite a sustainable subsequent decline to new historic lows. Unless I am completely wrong about the Dollar making gains against the Europeans this will imply a removal of support from the JPY crosses… I am just finding the current pullback in EURJPY just a bit deep for comfort even if it stalled at the 112.20 resistance yesterday. It still looks bullish to me and it’s this anticipated extension of gains that concerns. This triangle is something to watch closely as should both USDJPY and EURUSD collapse the play has to be on the cross.

Otherwise, I feel today will see more sedate trading and the risk of some choppy moves again.

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. (+85 pips)

Good luck
Ian Copsey

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

Tuesday, December 14, 2010

This move down in the Dollar looks as if it should extend a little further…

December illiquid markets are a combination of deathly, dull and erratic ranges that when they break just make a huge adjustment within a flash. The latter is what we saw yesterday but didn’t reflect what I had thought to be the risk… In some ways I’m happy as I didn’t really like the Dollar upside from a structural perspective but still being a correction leaves us with a mixture of alternatives. I understand that Lunar cycles are still bullish on the Europeans through to next week at least, perhaps the end of the month at a stretch so this leaves us with the prospect of a similar pattern of consolidation and frenetic breaks…

As things are now my main impression is that we may not have seen the end of the Dollar losses quite yet. Clearly the collapse has brought with it more bearish momentum conditions which, at the very least, should prevent a significant reversal but could end up with an eventual one. My own preference is for a mild extension of yesterday’s Dollar losses but then a return to consolidation/correction.

Even USDJPY was hit by this. The reversal at the 84.29-39 area was expected but I had expected a correction and slightly deeper extension higher before the larger reversal which we saw yesterday. However, equally, I can’t see this bearish pullback deepening much more and, indeed, may well have completed the correction.

That leaves the cross looking form – and again something I had not really wanted to see. It is still on the bearish side overall but this rally cannot extend much further without breaking the larger bearish structure. It would be prudent to take a more neutral approach to this as it would seem, at this point, that the only thing that could allow the cross to resume is strong weakness in USDJPY. Well, it’s not impossible but I don’t think it’s a call I want to make at this point…

As always at this stage in December, take care. The whippy & erratic market behavior could easily resume…

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. (+75 pips)

Good luck
Ian Copsey

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

Monday, December 13, 2010

I still feel the main risk is consolidation

With now just 9 days of trading before Xmas, of which only this week will have any resemblance to normal trading conditions (and even that is only a distant resemblance) the hunger for risk remains minimal. The past week has reflected this sentiment through the whippy and difficult market conditions and frankly I can’t see this changing – or perhaps with the exception of USDJPY and by implication the JPY crosses.

While the stand-off between the Dollar and European currencies still looks to extend, USDJPY bounced perfectly from its support on Friday to set up a final push higher in the rally from 82.33. Once this is complete the tide should turn and retreat to lower levels and drag the crosses with it. However, I do feel this will be for a correction only in USDJPY, the question being just how deep this can go. EURJPY on the other hand I tentatively feel can move lower in a more sustain manner. Now, that either means USDJPY will reverse lower totally (likely only if it doesn’t make minor new upside targets over the coming day or two) or EURUSD is going to have to provide the fuel for the drop in the cross. Frankly this looks more likely. What is a little difficult to judge at this point is quite how long the current impasse will remain.

The European currencies have been mapping out a complicated and hard-to-follow corrective pattern. However, this does seem to be part of a mild bearish Dollar correction which should be followed by a resurgence in Dollar strength. This should always be kept in mind as the main risk with the immediate corrective price action due to come to a conclusion – but as I mentioned “when” is more difficult to judge.

For the moment I see the messy moves remaining so look for the key USDJPY and EURJPY resistance levels and also the break levels that would allow the downside to resume…

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

Friday, December 10, 2010

Momentum is slow and may retain the consolidation but keep a watch on the Dollar upside

Daughters’ and their cuddly toys lying on the floor… cloud the picture and that caused those whipsaws about which I had warned some care. I am still very wary of this December market. Corrective price activity due to low liquidity can cause the most complicated corrective structures and this makes me approach the current market with a lot of caution.

Even as I went through the currency pairs I found myself Dollar bullish on one and bearish on the next… then bullish again. It doesn’t make for confident calls. However, one currency that stood out was EURJPY. It’s still early days but yesterday’s peak came in right on target and one that implies significant losses. Well, that does mean one of two things: either USDJPY is going to take a dive or EURUSD will…

Well, EURUSD was one of those currency pairs for which I felt a Dollar bullish view had legs. I am only mildly bullish USDJPY. That would take care of the downside for the cross… However, the cross still appears to have a modicum of support for the correction higher to deepen but I suspect it should break lower again later today.

The Aussie looks bearish too… It’s just GBPUSD and USDCHF where I feel less inspired by the Dollar upside.

I therefore intend to start the day with a more neutral stance and watch what happens once EURJPY has corrected sufficiently to suggest another leg lower may occur. I should warn that even with a new low the next risk is still for a correction higher and probably quite deep. Therefore I feel we should avoid expecting particularly aggressive Dollar gains just at this point.

Beyond these comments the by-word for this time of year remains caution. I should remind that it is a particularly flaky time of year where relatively small orders can generate excessive moves. Such is the reluctance by major market players to risk any loss reducing bonuses the preference is to remain square and keep the current bounty. However, with such thin liquidity it can send daughters’ block towers tumbling in an instant…

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. (+190 pips)

Have a great weekend
Ian Copsey

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


Thursday, December 9, 2010

This market looks a bit like my daughter’s bedroom…

Yep, you’ve got it… One hell of a mess…

The more I look at what’s happening the more I have to look in the thesaurus for words that mean, messy, erratic, complex, muddled, cluttered, chaotic, confused, disheveled, disorganized, muddled, slapdash, untidy, unkempt, disorderly, sloppy, slipshod and bedraggled…

Perhaps I should basically suggest that today should be up and down but leave you to guess which comes first. In some cases it does look like a flip of the coin will do. Well, I do have a view and I’m quietly confident of it, but this is one of those markets where we need to be aware of minor breaches and quick reversal where stops could easily be triggered.

However, the common risk I see across most of the currency pairs is basically Dollar bullish followed by a reversal lower. If I am to choose a second ranked risk then it’s still Dollar bullish followed by consolidation. Obviously the last will just cover all eventualities – Dollar bearish and then bullish… However, if the final alternative occurs then we may well be seeing a more directional move… However, the first option remains my favored outcome but I do feel we have to go through this whippy move higher first…

If there is any pair that may escape this pattern it could be USDJPY. I doubt it as I feel we need a deeper correction first before it can go back to retest and probably break the 84.39 high. Don’t get too carried away with the prospect of a sustained rally though.

A last note on EURJPY… It has come to a point where there may be a final push higher but it’s approaching key resistance levels. This may be a product of USDJPY pushing higher but frankly, given the level of the anticipated whippy moves I’d rather concentrate on price in each currency pair. Once this high in EURJPY is in the risk is lower but will probably have a slow start which means in the slightly larger picture we’re still talking range trading to a certain degree.

Treat each trade as short term, take profits early…

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. (+30 pips)

Good luck
Ian Copsey

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

Wednesday, December 8, 2010

Dollar gains look more likely today

The caution I voiced yesterday concerning Dollar strength proved correct as it spent most of the day on the back foot but losses were restricted which in turn provoked a reversal back higher by the end of the day. While I can’t totally rule it out I don’t think it’s quite time to call for a massive extension of gains but the upside does seem more vulnerable at this point with hourly momentum having reached current levels with some panache. A pullback does seem due but later extension does seem probable.

We’ll have to see how this goes but as far as I can see the sort of areas these structures appear to target do not really point to major now highs at this point. I am therefore more inclined to a more whippy and corrective style of development. Given there is only a week or 10 days of decent liquidity the prospect of grinding out the year in a choppy manner does seem to be more probable.

In particular the strength in USDJPY was much more evident than I had been looking for and the push higher does appear to have ruled out the more direct bearish risk. This pushes me more to the probable consolidation to be an upward movement rather than sideways. Therefore we should always be looking out for an eventual end to any Dollar losses.

This strength in USDJPY has taken EURJPY back higher and seems to have taken the fuel out of the downside. I’ll therefore take the foot off the bearish accelerator but can’t actually say that we’ve seen sufficient strength to rule out the bearish structure totally. In particular this cross has the potential to generate some rather horrendous consolidation patterns so best be cautious until some other catalyst develops.

Therefore, today does seem to imply a pullback lower in the Dollar and who knows, this could last for much of the day if the market has lost interest but I do feel the current basic risk is for a correction higher in the Dollar.

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

Good luck
Ian Copsey

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

Tuesday, December 7, 2010

Dollar gains have been positive but haven’t confirmed follow-through…

I was a little tricked yesterday… The expected high around 1.3447 didn’t materialize and it was only later I found the broker feed to my charting hadn’t caught the blip higher on Friday to around 1.3437-41… So that nullified the risk I had outlined and generated direct Dollar gains over the day.

So that looks positive for the Dollar uptrend… or does it? What has been noticeable is that yesterday’s Dollar stalling points have been in areas that generate a significant ambiguity in the structure. In fact, they are almost pinpoint perfect for a more negative structure… What is more, in the gains seen yesterday I’m not even convinced that they would work well in a direct Dollar bullish structure.

What does this mean? To be honest, there are a number of alternatives. We have to remember that as we move into the most illiquid time of year and at a time when the underlying desire is for traders to retain profits the thirst for risk is not foremost in their minds. The political background is awash with confusion as major industrialized nations compete for the prize of being the most incompetent that there is a valid risk that we could just see a period of consolidation as we head into the Xmas-New Year break.

As a broad generality December illiquidity has a tendency to generate one of two reactions: a persistent trend or plain standard consolidation. Therefore, at this point, with the ambiguity it is best to play our cards with caution until enough are face up to judge which of the two will develop.

In particular I can see some signs of potential AUDUSD strength which would not be a surprise as a carry trade over the New Year, and also in USDCAD which remains within a long, long consolidation range.

If the consolidation alternative proves correct then the one area I can see risk is in USDJPY and EURJPY. The latter still looks bearish to me so if USDJPY loses out by too much I think we could see a swift move lower to fuel the cross.

These are all potential outcomes. What we need to do right now is assess the risks of each.

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. (-20 pips)

Good luck
Ian Copsey

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

Monday, December 6, 2010

Beginning of the reversal or the beginning of the end?

Friday provided yet another surprise. The break higher in EURUSD and lower in USDCHF was not on my agenda. At first I looked at it and wondered whether this mean the Dollar will begin to lose out again. Maybe the multi-year down trend was back in place. Well never say never, but the USDCHF high just doesn’t appear to fit into my prior assumptions. The fact that GBPUSD failed to play tag with the move also provided another misplaced piece in the puzzle.

The glaring alternative is that we are seeing a pullback in EURUSD and USDCHF to the Dollar’s gains thus far. In fact, this scenario does appear to be very convincing. Even pullbacks in GBPUSD and AUDUSD look possible. What about USDJPY? Well, it’s less convincing but also just a little ambiguous but if I have any stronger wave structure and relationships then they’re on the upside and not down…

In general from the weekly review: http://www.fx-forecaster.com/files/Weekly_Review_Support_Resistance_3rd_December_2010.pdf the overriding impression from the longer term charts is that we have merely seen a pullback to the Dollar strength so far with several currencies retesting respective daily Clouds which are still basically Dollar bullish. These should be enough to generate a reversal of the losses thus far at the very least and will keep the underlying risk Dollar bullish – at least for the short term and if this develops as I think, then for the longer term also.

Indeed, I feel we have either seen the full extent of the correction in most cases or we are very close to the end.

Just a word on EURJPY. I remain looking for stronger losses although the very short term does have a continuing mild risk of the pullback higher deepening. I’m tending to err on the side of direct losses but feel we do need to keep a close eye on the near term. Most likely this will be driven more by a falling EURUSD along with a less aggressive move higher in USDJPY.

Thus, today look like a day for identifying the Dollar lows…

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

Have a profitable week
Ian Copsey

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

Friday, December 3, 2010

The Dollar pullback should soon be complete…

Yesterday was a mixed bag… and a pretty messy one as well but one that did basically see Dollar losses by the end of the day. It has brought us close to the retracement areas against EURUSD and GBPUSD that I mentioned yesterday. Beyond that USDCHF and USDJPY both dropped rather strongly and against expectations. These two in particular have caused a certain degree of doubt over whether they can resume the current Dollar bullish structure. However, I can’t say it has broken as yet, but quite what they represent is more unclear and do beckon a more cautious approach.

In particular there has been an ambiguous interpretation of this pullback in USDJPY. Either way the implication is for eventual losses to a new historic low. The question has been more whether the current correction is complete. Given EURJPY has also approached a full correction the prospect of both USDJPY and EURUSD falling is not out of the question, but probably preferred, even if it is only for part of the entire decline. In particular a break of yesterday’s USDJPY low would be a strong pointer and below 82.77 would confirm…

The dip in USDCHF was totally unexpected also. In many ways I have remained bearish USDCHF overall and have considered this rally as corrective. Its recent sporadic pattern of correlation with EURUSD has made it more difficult to ascertain quite what it will do and when. Ideally it should still extend its gains since if EURUSD makes the expected final decline it would appear logical that USDCHF can rally to the higher target I have been looking for… I think the next couple of days could well highlight the strength of this expectation.

So as we go into the end of the week I do see the corrective targets in EURUSD, GBPUSD, AUDUSD and EURJPY all close to current price. Therefore watch these for signs of a resumption of Dollar gains… or for break which would then turn the Dollar on its head and imply a larger reversal.

Hopefully USDCHF and USDJPY will extend gains one more time but take care with these given the slight deviance from the expected rallies in both.

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, December 2, 2010

The correction should continue today

I thought all was going really well for the first half of the day, with key levels being tested simultaneously across the Europeans but the anticipated resumption of Dollar gains didn’t materialize… This was quite disappointing but the Dollar rally hasn’t finished yet. The current pullback still has a little way to go yet but I suspect that by the end of today or perhaps into tomorrow we should see the correction complete for the uptrend to resume.

This should mean that by the middle of next week we should see the Dollar end its rally and generate a reversal. The interesting point in all this is that from the perspective of USDCHF the Dollar’s gains appear to have been a correction only. The medium to long term implications for GBPUSD and EURUSD are therefore rather unclear. However, at this point I think we should just be prepared for Dollar losses to resume by the end of next week and see how they develop.

USDJPY saw limited losses yesterday as expected, actually not even reaching my minimum target which was only 10 points below the previous 83.41 low… This should set up the final rally here also to coincide with the expectations of a return to Dollar losses against the Europeans. The difference here though, is that I will be expecting a move to new historic lows – possibly around 73.50-74.50. If I consider this move in USDJPY to be indicative of what may happen against the Europeans then the Dollar downtrend appears to be implied…

With the deeper correction in EURUSD, equally we have had the same situation with EURJPY. No new lows and a break of the corrective resistance I was considering means we are seeing an alternative picture, but still overall bearish. The correction higher has a little more to go here also but once complete should herald losses and potentially to approach the old 105.42 low…

AUDUSD has also benefited from the Dollar weakness. I’m a bit more mixed here with potentially a complete correction already, but equally with a structure that would allow one more dip… The upward structure is a bit messy so take care. USDCAD… what can I say about the Loonie… but just take care…

Today’s free analysis is for USDCHF and can be found on http://www.fx-forecaster.com/DailyForecast.html along with yesterday’s Trader Package Review & Trade Set up report. (+205 pips)


Good luck
Ian Copsey

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

Wednesday, December 1, 2010

A mild pull back is possible but the underlying Dollar risk remains higher

On the whole I was satisfied with yesterday’s moves. Not all targets were met with accuracy and GBPUSD dipped lower than expected, but otherwise the basic anticipated directional moves developed. The Dollar highs against EURUSD, GBPUSD and AUDUSD all appear to be intermediate projection levels which means there should still gains ahead. However, bullish momentum has become stretched and the first move today is therefore more likely to be corrective.

Now, here is where I see some potential deviation between EURUSD and GBPUSD & AUDUSD. The latter two appear to have reached supports which appear to indicate a slightly longer correction while EURUSD does still appear to require one more extension lower. I do have some reservations since there are bullish divergences here which should be acknowledged. I shall provide the resistance levels here which I feel will cap for the next leg lower. However, any breach of these resistance levels will bring these three into correlation.

USDCHF dipped lower as I had preferred, and quite against the Dollar gains seen elsewhere. It didn’t quite reach the support levels I had been looking for but probably this was enough and the implication is therefore still for Dollar gains. It would seem that for today USDCHF and EURUSD may well be correlated for a change.

USDJPY also dipped as warned. I’m not sure the pullback is complete. Certainly it has done enough to complete a correction but the lack of an hourly bullish divergence and the risk of one final dip should be recognized. Overall I do feel this will see one more rally but doubt now whether this will be able to break above the 85.92 corrective high.

This should prevent EURJPY from repeating it’s super-bearish performance yesterday. I do look for the cross to trade quite similarly to EURUSD – that is a correction higher followed by losses but it seems that the bulk of the move has occurred. From the new low – as with my expectations in EURUSD – we should see a longer lasting correction before another bout of losses.

For today be aware of critical break levels and the potential for a solo Dollar rally against the Euro (maybe slightly against the Yen) but from then a period of correction.

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. (+110 pips)

Good luck
Ian Copsey

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