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HARMONIC ELLIOTT WAVE

Monday, January 31, 2011

So far… so good…

The status quo stretched far into the end of the week and finally, it seems, we have our reversal. I say reversal but the only clean break was in EURUSD. The lack of enthusiasm shown by the other 3 majors is somewhat of a concern and that’ll require a little further monitoring to ensure they pick up their socks and decide to succumb to the Dollar’s strength. This could even imply minor new lows in USDJPY – the drop there defying what I had thought to be the start of its own rally.

Let’s not get too carried away with the drop in EURUSD also. I do prefer an overall Dollar view but on this late Friday showing the only thing it has done is break below a wedge support and reacted at the first target at 1.3572. The Dollar Index has also not managed to break above the key prior swing highs at 78.40-50. So there’s still work to be done and until it’s complete we cannot totally take our eye off the ball.

The big clue for me still lies in EURUSD – a completed wedge pattern which tends to reverse to meet its target relatively swiftly. It began at 1.3243 and therefore it should imply a drop close to that corrective low in quite a persistent manner. Thus, any deviation from a “persistent manner” will raise the attention we need to pay on key Dollar support levels. At this stage I would not expect any deep correction and certainly nowhere close to the broken wedge support line.

A note on USDJPY… The drop was clearly note expected but I find it hard to see how it can rally directly at this point but probably require just one more low. This could be between 81.84-97. At a stretch I could see a dip below but not by too much. If my Dollar bullish view is correct then USDJPY should be one of the drivers along with USDCHF… The lack of follow-through after EURUSD does bug me a bit.

Thus, today’s a day for watch for key Dollar resistance levels to be broken to confirm further strength that should last for a few weeks at least…

Today’s free analysis is for USDCAD and can be found on http://www.fx-forecaster.com/DailyForecast.html along with Friday’s Trader Package Review & Trade Set up report. (+15 pips)

Have a profitable week
Ian Copsey

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Friday, January 28, 2011

Has the Dollar found its low..? Part 4 ½…

Yesterday proved a little more interesting… well, it seems. USDJPY rushed higher while the strength in the European currencies was limited to within the required limits. The Dollar Index remained above the support which I indicated could well force an earlier then expected move back into more extensive Dollar weakness.

So, we’re back to Monday when I had first suggested the Dollar should find a low… Was yesterday the day? I think so… At the very least now I feel that the Dollar must rally now or forever hold its peace. It has all the require momentum signs but has fallen a little short of actual confirmation and that’s what we should be looking for today.

Both USDJPY and EURJPY are united in pointing to higher levels it seems though not quite in such a dramatic manner as seen yesterday. Today the anticipated follow-through should be encouraging but I doubt a runaway rally.

For the Europeans, EURUSD and USDCHF just appear to require breaks through yesterday’s low/high (respectively) to generate the required confirmations. That GBPUSD appeared more to complete a correction rather than a more constructive reversal higher.

USDCAD and AUDUSD look more to still be in consolidation ranges.

Thus, apologies for the limited verbage in this outlook but it’s all down to confirming yesterday’s tentative Dollar lows…

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. (+60 pips)

Have a great weekend
Ian Copsey

VIEW VIDEOS INTRODUCING HARMONIC ELLIOTT WAVE

Thursday, January 27, 2011

If I have to hold my breath any more I’ll turn red…

I mean… I’ve been patient, noted other technical factors, identified the key Dollar supports, seen USDCHF find its retracement target and longest of all I even waited for the FOMC to make some sort of impact. What more do I have to do?

The longer this drags on, the longer I begin to smell a rat. The trouble is the rat is a rather Jekyll & Hyde character that would satisfy some currency pairs and not others. I still keep an eye on the Dollar Index which has also maintained itself above the 77.70 target I mentioned on Monday – in fact it bounced precisely from there – but much lower beyond the next projection at 77.45 would tip the scales to a larger dollar decline. This is my long term view. I just felt there needs to be a decent Dollar rally to finish a triangle before that happens…

So let’s set up where all this goes right or wrong… EURUSD 1.3750-60… USDCHF 0.9300… USDJPY 80.90 and USDINX 77.49… For the moment I prefer to take a more Dollar bullish stance but you may probably be able to hear my gasps. Ranges have become so tight it’s very difficult to give much of an idea how the minor wriggles may develop to point the way. We are probably that close to a bigger decision one way or the other. To be honest it won’t take too much of a nudge to tip EURUSD off the edge of the cliff. In fact, yesterday’s low would suffice.

So it’s a short outlook today. I made it that way so that you can hold your breath for a bit longer…

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. (+115 pips)

Good luck
Ian Copsey

VIEW VIDEOS INTRODUCING HARMONIC ELLIOTT WAVE

Wednesday, January 26, 2011

Well, has the Dollar bottomed out? (Part II)

It was an interesting day in many ways yesterday… GBPUSD nosed dived and USDCHF decided to follow-suit and extend its losses. Both of course suited me as I had been in favor of both these moves. However, USDJPY edged lower and EURUSD moved into that 1.3700-05 target I have mentioned several times over the past week...

So the Dollar declined… But no! The Dollar Index has not broken Friday’s low… Technically maybe I am still right…

However, we are close to make or break for the Dollar in general. The interesting thing about the decline in GBPUSD is that it stalled 20 pips above the support I declared must hold to retain the mega-bullish structure I had been looking at. Surely not… It can’t rally so strongly can it? Well, technically that structure is intact so I can’t totally rule it out but I still prefer a bullish Dollar – from the Index point of view.

There are several things that need to happen to confirm this. First and foremost USDJPY and USDCHF must find a final low very quickly. The latter has fallen into my retracement target area and the bullish divergences are supportive. The current rally in GBPUSD must remain limited to below 1.5850-70. EURUSD must sort itself out by the end of the day. I am seeing potential for an overshoot above 1.3700-05 but I have fairly strict limits for such a move.

In case the unimaginable happens… which I can’t imagine it will… If we see too much Dollar weakness it will imply that the monthly/weekly triangle in the Dollar Index actually completed at 81.44. The implication is quite significant and strong Dollar losses…

Just as a matter of possible interest, in line with the occasional comments I make on the DJIA, this is now getting very close to a level that should trigger a major correction. The 12,350-600 area (probably towards the lower end of the range) should provide a peak and a subsequent price drop of around 20%. We’ll have to see what’s in store…

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. (+150 pips)

Good luck
Ian Copsey

HARMONIC ELLIOTT WAVE - THE BEAUTY OF A FULLY FRACTAL STRUCTURE

Tuesday, January 25, 2011

Well, has the Dollar bottomed out?

The general script I wrote yesterday appears to have gone to plan which begs the question whether the Dollar has bottomed as promised. Answer… eeerrrrr… maybe…

The EURUSD script couldn’t have been much better, the right support holding and a strong rally but which fell just short of target… only by 16 points. Bearish divergences are pretty mature and perhaps I can be forgiven for the shortfall. I have to admit though, the rally from the 1.3539 low is not as crisp and clean as I would like… That has left one or two doubts in my mind. The Dollar Index fell short of its target by 13 points and there are some decent bullish divergences there also.

However, we need to check across the board. Actually, I’d like to think that USDJPY has found its low. It seems to have a sound argument for that. USDCHF? Maybe… I’m not quite so convinced and actually prefer one more dip… GBPUSD? This was a pet bull a week ago. Yesterday’s moves could even be considered constructive … but it will take a break above the 1.6015 high followed by 1.6059 to really cement that structure.

What about the EURJPY cross? Well, a good chance that has topped. There are good bearish divergences but hourly momentum is beginning to creep higher threatening a break… but if that occurs will it be USDJPY of EURUSD that drags it higher?

AUDUSD is within a whisker of a more bullish structure. I wouldn’t want any higher else this could turn, like GBPUSD holds the same risk, strongly higher… Momentum doesn’t provide any clues here.

So, let’s just say I feel there are modestly firm indications of the Dollar turning higher. I do see some risk of minor follow-through in some cases – even EURUSD could surprise to reach just a bit higher but as long as the momentum conditions deepen the Dollar bullish divergences my preference remains for the Dollar to begin making gains…

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

Good luck
Ian Copsey

Harmonic Elliott Wave- fully fractal and measurable

Monday, January 24, 2011

The Dollar will bottom out today…

Friday went broadly to plan… We have EURUSD, USDCHF and the Dollar Index all pointing to the same event – a larger Dollar bottom due later today.

The first part of the day should be taken up with a correction to this morning’s Dollar dip on open. That should open the way for the final drop, my guess being in the European afternoon when North America joins the fray. Dollar bullish divergences are developing across the 4 majors which encourages. The only pair I have problems with is GBPUSD. My structure is still very bullish. It really is bullish… In fact, it’s so bullish I really have doubts about it. However, I mention the situation just in case some catalyst develops… you know, something like the cleaner in 10 Downing Street finding £100bn in cash under the Prime Minister’s mattress…

The other pair where I have some doubts is USDJPY. I prefer bullish but it’s the current structure that is rather vague. I’d like to think that we’ve seen the low already but that seems a bit tight. Take care in this one. Obviously the clues could come in EURJPY … However, even this I can’t see as looking directly bullish. A correction is due and it depends more on how long it can remain supported before a correction. Will it be fueled by a drop in USDJPY or EURUSD? However, overall I still feel the cross will eventually pick up on the back of a stronger USDJPY compared to EURUSD losses…

Unless AUDUSD makes a stronger rally now it’ll succumb to the downside… USDCAD’s failure to break above 1.0030 signals further losses…

Thus, the outlook for today should be early Dollar strength in a correction, a final decline – watch the 77.70 level in the Dollar Index – before a period of Dollar strength that should last 2-3 weeks at least I feel…

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. (+110 pips)

Have a profitable week
Ian Copsey

Early birds’ discount available for the first Harmonic Elliott Wave webinars available

Friday, January 21, 2011

Partial clues

Yesterday had some success in a few areas. What really let me down was the limited bearish action in EURUSD and rush higher in USDJPY – with the consequent impact on the cross. I had to look hard at both EURUSD and USDJPY today. In many ways I’m rather happier with the recovery in EURJPY as it tends to suit the original view I had. What’s more, I wasn’t entirely satisfied with bearish USDJPY view as it made life tough matching potential downside targets across the timeframes. Happily, all that appears to have been solved.

I took a look at the Dollar Index also and this has focused my approach once again. Its pullback higher was actually in line with my expectations – that this is a correction and there’s one more low to come. When I look at the individual currency pairs this does still seem to be confirmed all round – with some doubts over GBPUSD… So… it should be a Dollar bearish day today… However, once this decline is complete be prepared for a reversal that should see quite solid strength as the Dollar Index does need to move back above 81.31. I suspect much of this will be fueled more by USDCHF, USDJPY and probably AUDUSD… and by EURUSD but I suspect to a lesser extent.

Right, now for some possible complications. GBPUSD seems to require a new low before it can rally… I also have USDCAD looking to be the contrarian also – a new high expected later today but that would appear to suggest subsequent losses…

Even EURUSD has a rather ambiguous short term look about it and I wouldn’t argue to ferociously if someone argued that should see a marginal new pullback low also. There we may need to balance with the EURJPY cross which itself needs a minor correction – but not too far – before that follow-through higher. Once this has reached its ultimate target it will imply a deeper correction lower.

So I suspect the first half of the day may well be a bit ragged and choppy but by the end the Dollar should begin to lose out…

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

Early birds’ discount available for the first Harmonic Elliott Wave webinars available

Thursday, January 20, 2011

It would be nice to have a day that was simple… today is not one of those…

Sometimes the structures develop like a dream, projections work and currency pairs correlate… From that perspective yesterday was a nightmare. It leaves me trying to pick out individual structures and uttering a deep sigh as no one currency seems to fit in with the others. That is a reflection of this morning’s analysis…

If we take EURUSD the initial cap at 1.3507 and then at 1.3537 were pretty much pin point. Now, these levels were implied within a scenario that would imply a recycling back to 1.3209-43. However, the bearish momentum divergences broke down. Never-the-less that would be my preferred view – so see a recycling…

The consolidation in GBPUSD, while not making a new high actually fits in with a deeper correction also. However, quite where we are in that pullback is unclear but certainly still at an early stage. USDCHF made a new low but seems totally tizzy-headed, flittering around like a drunkard looking for his next tipple… However, I remain with the basic view that a deeper pullback is required even in a larger bullish recovery.

USDJPY just declined but the structure there looks like a 1 year old learning to draw… However, I do feel there should be quite definable levels to maintain the downward move or see a break back higher. At this point the structure, if I have it correct, appears to imply a move just below the 79.70 low before a correction. That should put downward pressure on EURJPY. However, if I look at the cross individually I’d still prefer a move back to around the 112.18 high before the move lower develops. Therefore this requires some close attention.

USDCAD still points higher but I remain bearish in the longer run. AUDUSD… probably saw its high yesterday and now we need judge whether the decline will make new lows or just completes a correction.

Finally, the Dollar Index seems to have completed the penultimate low but requires a pullback before it can attack the final low for a reversal higher. This in itself tends to point more to weakness in EURUSD and GBPUSD followed by a final move higher. Thus, that’s where I’m going to be pointing today but just be aware of the background confusion.

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. (+60 pips)


Good luck
Ian Copsey

Early birds’ discount available for the first Harmonic Elliott Wave webinars available

Wednesday, January 19, 2011

Easy as she goes… there may be something not quite right in the Dollar decline

There were a few interesting moves yesterday and a few surprises amongst them all… On the face of things these moves could be considered quite positive for the immediate Dollar bearish outlook with EURUSD pushing to new highs, USDCHF dropping below support and GBPUSD rushing frenetically higher. However, I’m not quite convinced at this point… Perhaps I am reading too much into this but the important thing for me is that price develops in a manner that is consistent with structural expectations. I can fall foul of this and misinterpret. However, even when I took another gander at the Dollar Index I came up with the same conclusion…

I don’t think we are seeing the final Dollar dip just yet…

The rally in GBPUSD was a bit of a clue – being more like a particularly strong ending wave. It is now sporting a 4-hour bearish divergence. The drop in USDCHF should really imply a stronger decline. Yesterday’s EURUSD low wasn’t as deep as I would have preferred and the subsequent rally leaves some question marks over the balance of the ratios. Finally, the drop in the Dollar Index wasn’t really in line with a true directional wave.

While I shall approach this cautiously my feeling is that we may well see a recycling of the corrections and revisit yesterday’s EURUSD lows and hopefully to my target retracement before higher. GBPUSD has quite a way to go for its retracement also I feel but USDCHF is a bit of a mixed bag… If the Dollar Index is to retest the 79.60 corrective high then it may well require USDJPY to push higher again. That is one that concerns, I do admit… but EURJPY also seems a bit indecisive so would look to fit into this scenario

However, USDCAD looks like pushing back higher again… AUDUSD… well, I think this is still in a choppy rally – a little further to go but may well be a ratcheting move.

Therefore, don’t get too Dollar bearish at this point and be aware of the risks on both sides of the market. While I do have the preference for the correction to recycle the basic view remains short-medium term Dollar bearish but in a final move that should trigger a reversal back higher…

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. (+50 pips)


Good luck
Ian Copsey

Early birds’ discount available for the first Harmonic Elliott Wave webinars available

Tuesday, January 18, 2011

The Dollar Index appears to show the larger picture

I had a quick look at the Dollar Index over the weekend… My impression was that in the much bigger picture that it looks bearish. However, more likely it hasn’t actually finished the consolidation from the low back in March 2008… It certainly looks like a triangle, though we have to remember that these can easily morph into other patterns. However, at this point it looks quite convincing. However, it does seem to require one more rally after this current decline.

So this morning I set about looking for what would drive the Index back higher. On Friday USDJPY was one of my favorites but it has sure slipped below my supports. I wouldn’t want this to slip any further else it would imply a much stronger decline…

EURUSD… Yup… I can see that reversing lower after this current rally…
USDCHF… Yup… I still prefer this higher but it needs to get its socks on…
GBPUSD… … … I’m surprised but I felt the rally seen has made this look quite bullish but with a risk of a minor pullback. In the bigger picture this is still a strange one as it really appears to be under the influence of a multi-year bearish cycle, though probably in a sideways consolidation at this point.
AUDUSD… always a law unto itself and at this point wouldn’t want to suggest too much though this current decline hasn’t really damaged the larger monthly uptrend.
USDCAD … I still view the break down from last year’s long sideways consolidation as bearish, the question being how long it can hang around before it finally heads lower more aggressively.

The overall multi-year cyclic expectation I have been working with does still suggest another 12 months (approximately) of a larger bearish Dollar influence and that seems to work with the Dollar Index. I’ll keep this loosely in the back of my mind. I do feel that over the course of the next few days we shall see the Dollar end this current downward move to resume the recent strength. The key will be how each of the currency pairs develop.

Today’s free analysis is for USDCHF and can be found on http://www.fx-forecaster.com/DailyForecast.html along with Friday’s Trader Package Review & Trade Set up report. (-15 pips)

Have a profitable week
Ian Copsey

Early birds’ discount available for the first Harmonic Elliott Wave webinars available

Friday, January 14, 2011

That settles that…

Please note that since Monday is a bank holiday in the U.S. the next report will be on Tuesday


Well, I wasn’t overreacting… Actually, perhaps I under-reacted since I hadn’t anticipated such an aggressive follow-through. That was quite a move in EURUSD… Well, that last statement is quite important. While EURUSD flew through the air with the greatest of ease, dragging GBPUSD in its wake, both USDJPY and USDCHF saw mush more subdued reactions. Indeed, these latter two actually held important supports that could still generate follow-through higher. But will they?

As far as I can see EURUSD has reached a level where a pullback is due and quite a moderate pullback too. This will provide USDJPY and USDCHF to react is they wish. Do I think they will? It seems like USDJPY is in the mood for another push higher. An interesting observation, although the structural development in EURJPY is not as crisp and clean as I would like, suggests that while it is due a correction now it may not be too deep and could make new highs later. Therefore, if the deeper EURUSD correction is correct, also the shallower EURJPY then it is logical that the cross should rally… Therefore watch the key support in the cross to confirm such a possibility.

USDCHF is less clear. It still retains the 4-hour bearish divergence – which clearly wasn’t confirmed yesterday. The structure of the drop is a bit messy – I don’t like it too much. However, the depth of the pullback and the fact it has remained above 0.9604 does fit a corrective retracement within a more direct rally. Thus, be aware of the upside potential. I think GBPUSD will follow a similar pattern to EURUSD…

AUDUSD was stronger than expected again and frankly hasn’t indicated a reversal lower yet… or not a strong one. Perhaps working with breaks is better but given the Aussie’s propensity to just keep going in one direction the upside may well be the more vulnerable side… Cautiously I feel that USDCAD should recycle higher…

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

Have a great weekend
Ian Copsey

Early birds’ discount available for the first Harmonic Elliott Wave webinars available

Thursday, January 13, 2011

Oh..!

Things were looking good for a while… Most currency pairs were basically behaving themselves… suddenly we had a group tantrum. Actually, I sat down with the assumption that I’d argue for Dollar gains once more. I ended the analysis with a very different impression… There are quite a few clues all supporting a Dollar bearish stance for the coming days.

Let’s start with the issue I have been pointing out for the past few days; EURUSD hadn’t seen a deep enough pullback to confirm that we were in a firm downtrend. I thought I had cornered that one when it bounced lower from 1.3045… Nope… it decided to extend its gains and far beyond what it should to be just a correction. Well, the only other interpretation of a fall with shallow pullbacks all through – a correction. The rather alarming conclusion is that we’re going to see the correction recycle back to 1.3497 and maybe just above…

Secondly: the rally in EURJPY. I had begun to consider the source of the strength should come from USDJPY although did have a slight nag in the back of my mind concerned about EURUSD losses making life tough… Well, this seems to be heading back to 110.23 again…

Third: I have been attempting to identify a major low in AUDUSD which did seem at odds with the U.S. Dollar bullish view. Well, its rally yesterday appears to have suggested we have seen the low and that implies new highs…

Fourth: USDCHF – as much as I wanted to call this higher the 4-hour bearish divergence has strengthened. I feel this will be just a correction and will need to be deep if the recycling to 1.0065 and above is still possible.

Fifth: The structure in GBPUSD is hard to fit into a correction and looks more bullish – even to the extent of possibly having found a major low. That I shall be more cautious with though…

The day should start with a correction to yesterday’s Dollar losses but watch for the key resistance areas to ensure that my prognosis is correct. However, I find it hard to think otherwise at this moment…

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. (+105 pips)

Good luck
Ian Copsey

Early birds’ discount available for the first Harmonic Elliott Wave webinars available

Wednesday, January 12, 2011

Just a little deeper and the Euro can extend its losses…

Yesterday’s basic message of messy consolidation proved correct in all but AUDUSD and perhaps EURJPY. Has the consolidation finished? Not quite I think…

The expectation on EURUSD edging higher still is based on a bit of retrospective fitting and that’s the bit that concerns me. If nothing else the slightly longer lasting pullback has provided a break to the relentless decline and does begin to point to an eventual halt and pullback. The question that remains is just where the pullback stops – which in turn will provide some stronger information on how far the current larger decline will stall.

GBPUSD found a top right in the resistance zone identified and assuming this holds then it’ll reverse back into range. Even if it breaks above yesterday’s high – and then the 1.5664 high I don’t see a runaway rally. I still expect losses here too. USDCHF pushed to new highs. It doesn’t posses a particularly tidy or clear structure but overall does fit into the general bullish expectation. Ideally this should extend further but there are a few short term hurdles to overcome that could complicate matters… Work with the structural support & resistance I provide.

USDJPY stalled nicely in the right sort of support area and resumed with modest firmness. It should be due a pullback now but while this doesn’t drop too far it does seem to work well within a bullish structure. Probably we need a little patience here but I feel that when the break higher comes it will be with more vigor than see over the last few days.

One interesting point about JPY is the EURJPY cross… Its deeper pullback higher appears too much for an immediate bearish structure… and given that deep rally to 110.23 I’m even beginning to contemplate the possibility that we may not see a move below the 105.42 low… I do still feel the downside is probably in need of one more push lower but the strength shown recently is causing me a lot of structural issues within a bearish move… Take care here therefore…

AUDUSD needs to stall quickly. Maybe it found its final low yesterday but I wouldn’t rule out one more dip. USDCAD… more likely should see a recycling back to 1.0033-47 but not before pne more dip…

Today’s free analysis is for USDJPY and can be found on http://www.fx-forecaster.com/DailyForecast.html along with yesterday’s Trader Package Review & Trade Set up report. (+10 pips)

Good luck
Ian Copsey

Early birds’ discount available for the first Harmonic Elliott Wave webinars available

Tuesday, January 11, 2011

The Euro takes a breather

Yesterday’s EURUSD spike lower in thin Australasian trading appears to have provided a low that has potential to provide the deeper pullback I had been waiting for. It’s still a little difficult to identify the precise retracement targets but there does still seem further to go.

Add to that the risk of recycling or continued sideways consolidation in other currency pairs the outlook looks pretty bleak today in terms of either strong directional moves or the risk of further choppy price behavior that could see stops whipped out.

There also appears to be a certain disconnection between currency pairs, reduced correlation and a go-it-alone type attitude. The good news is at the end of these individual corrective structures we should see some more significant directional breaks and from what I see, all Dollar bullish. Patience does therefore seem to be the by-word for today but I feel there’s a good chance that by some time tomorrow we’ll begin to see the Dollar resume its move higher.

Even EURJPY has become a little stuck and faces what I see is more potential for choppy pullbacks before extending its losses which I still see coming from EURUSD. We do seem to be approaching a more significant period of correction for this cross but, again, more patience is required before that should be seen

So there’s not a lot to note today above and beyond the points I have mentioned. Certainly I feel it’s a day for caution and possibly to be safer a day to keep trading to a minimum unless some clear and obvious trades pokes its head up. Waiting for the limits of the expected corrections appears a better strategy.

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. (+35 pips)

Good luck
Ian Copsey

Early birds’ discount available for the first Harmonic Elliott Wave webinars available

Monday, January 10, 2011

Hey... why are you picking on me?

Cried the Euro as it waved goodbye to leave the other European currencies unscathed… A typical NFP reaction produced the normal mayhem as the market panicked one way, then the next but the market had its way… Down it went, even extending lower in early trading before most brokers had cleared the sleep from their eyes. However, both GBPUSD and USDCHF remained aloof, casting disparaging looks at the political union and even seeing GBPUSD actually rally after Friday’s release…

The apparent delinking between the Europeans continues therefore and somehow I have to make sense of the almost straight-line decline which began a week ago. There appears to be no return for it at this point though I do wait for some stronger pullback as must occur at some point. In fact its hourly chart reminds me of the daily USDCHF chart down from 1.1730… and I don’t think the latter has quite finished its larger decline yet though nor do I think it will continue directly at this point…

If I look at GBPUSD then there seems no doubt that it’s in a sideways consolidation, most likely a triangle of some sort and that will still take another day or two to work through with the ultimate result being losses. That tends to make me look for limited follow-through in all 4 majors and potentially providing a correction as we start the week.

However, the picture of Dollar strength is the more dominant influence right now and it’s more a matter of “when” rather than “if.”

I’d add that the picture in EURJPY is also beginning to show signs of some more persistent corrections. I Can see possible minor new lows as we start the day but a correction is due there also – but there’s still one more deeper decline required before a more sustainable correction develops. This pair is still very much in a downtrend.

USDJPY itself is at a stage where it can either extend the sideways consolidation but does seem to have more upward potential over time. AUDUSD… probably still a little lower to come but may consolidate ahead of that. USDCAD has also similar potential for a complicated correction before the downtrend resumes…

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. (+85 pips)

Have a profitable week
Ian Copsey

Early birds’ discount available for the first Harmonic Elliott Wave webinars available

Friday, January 7, 2011

I really want to be Dollar bullish… but it’s still tough…

Well, EURUSD broke lower. The other 3 majors remained in their trading range… AUDUSD moved a bit lower, USDCAD retraced as expected and EURJPY dropped…

There’s nothing conclusive in all that. It does seem to demonstrate a certain disconnect between EURUSD and the rest but hardly with any real spirit. If you look at the decline in EURUSD from the 1.3433 high there has hardly been much of a correction. That isn’t normally a sign of a true directional wave. It may just develop but will need a deeper pullback at some point… Indeed, unless 1.2960 breaks (yes, not the 1.2968 low – and which has been retested over the past few minutes) and followed by 1.2928 & 1.2909 without any deep correction I’ll still have a reluctance to call this any lower for the moment…

Even the structure in GBPUSD doesn’t appear to be that bearish. It’s possible to see it develop – but almost certainly need a pullback of come kind first. USDCHF is in a situation where it just needs to get on with the rally and pretty quick if it is to avoid a deeper correction. I’m open either way in this, the still thin New Year markets continue to generate rather extreme projections, shallow corrections and sometime extra-deep ones. It’s easy to bite at the Dollar bullish bit with the eye for robust gains but price needs to demonstrate this all round. Right now there are just too many inconsistencies to make me feel that comfortable.

Even if we consider EURJPY… fine, it declined yesterday and ostensibly in line with the general bearish trend that had been developing well until the pullback to 110.23… The problem is fitting this into a structure with correct ratios that would suggest that it is going to extend to the 100-101 target area. It has stalled just too high for this to occur…

Thus, even here I feel a pullback is due – and potentially a lengthy sideways consolidation before it can extend losses. The risk is that it will not and just head above 110.23 again – an event that would make the long term picture quite bullish. That doesn’t quite sit well within my expectations which raise the risk of consolidation.

Thus, I still feel patience and care is still required…

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)

Have a great weekend
Ian Copsey

Early birds’ discount available for the first Harmonic Elliott Wave webinars available

Thursday, January 6, 2011

Is this really a sustainable Dollar rally?

There can be no argument about yesterday’s Dollar strength that was pretty much uniformly seen across the board. Given the high degree of independence that has caused all four majors to decline at the same time, to see the Dollar’s perform equally robustly is really quite a novelty these days… In that case, maybe I should say that I smell a rat… or at least a smelly pied piper from Hameln.

In many ways I want to be bullish Dollars having seen the strength in USDCHF and (unexpectedly) in USDJPY… For these two in particular I can see some logic in a bullish move. While I had looked for a minor new low in USDJPY it was with the expectation that we need another sharp recovery. For USDCHF I found the pullback to 1.0065 as rather too shallow so a recycling higher also seems appropriate.

Actually, even in GBPUSD I can see some logic in one more low – and I do mean just one more low. Overall all three currencies I have covered have strong monthly cycles all pointing to Dollar losses into next year and the losses in USDJPY and USDCHF in the face of Dollar strength elsewhere have bolstered that big-picture view. Whether they recover to higher levels is not too significant at this point and actually I’d welcome that move.

However, where all this does seem to come unstuck is in EURUSD… The depth of the decline from 1.4281 has been something which I find very difficult to accommodate. Well, I could but it would need to make a significantly lower low below 1.1879. By a long way. This is where I have the problem… The required decline in EURUSD would be far greater and take much longer than the rallies in USDJPY and USDCHF… and I’m really not too keen on such a decline in GBPUSD.

Clearly something has to give. At this moment the larger cyclic picture into next year still seems the more dominant evidence judging from all 4 majors with the exception of EURUSD… I cannot argue with yesterday’s Dollar strength but in EURUSD I’m still not 100% certain that it will extend losses – but the 1.2968 low appears to be the critical trigger – so let’s see whether it can manage to test this…

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. (+35 pips)

Good luck.
Ian Copsey

Early birds’ discount available for the first Harmonic Elliott Wave webinars available

Wednesday, January 5, 2011

The solar eclipse appears to have caused the market to go crazy…

Well, that’s the only explanation I can think of to explain why EURJPY has gone totally wild… The move higher appears too high to be counted as a correction and the pullback from that high appears to low to also be counted as a pullback… So which is it? Clearly we’re going to have to look at the straight Dollar-currency pairs to get any idea…

Let’s start with USDJPY… The high there at 82.27 was right in line with a retracement level I had as a reserve. Will it go down? I think so… However, there is a mild risk of a marginal new high before it does so… Whether it’s direct or from a marginal new high I do still feel this has to go down or risk further extreme confusion…

Then what about the Europeans? These three seemed to move totally independently of each other. EURUSD made a marginal new high but has dipped back down. GBPUSD moved sideways for most of the day and then shot higher then appears more to be seeing a correction rather than reversal. USDCHF on the other hand decided it was time to flex its muscles and try and compete with GBPUSD…

For the latter I feel that it’s hard to make a bearish case out of this move. It could easily still see a correction lower but I am rather reluctant to see this extend losses too far. The minor new high and reversal in EURUSD actually presents a very interesting conundrum. Unless it breaks the 1.3249 low by a large margin I feel the structure could well be a significantly bullish one…

If there is unwinding of positions to be seen from the moves towards the tail end of last year then a combination of all Europeans rallying is something that may not be too surprising… It’s not something on which I want to hang my hat but I feel it’s certainly something to watch out for but should be confirmed maybe today – more likely by tomorrow… Keep your eyes open for this.

AUDUSD seems close to an intermediate low and should be due a correction higher. I don’t think it has quite completed an entire correction but the level it has reached is one where I wouldn’t rule it out 100%. USDCAD looks pretty much set to test those lows again – just a matter of whether the correction recycles before it does…

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. (+45 pips)

Good luck.
Ian Copsey

Early birds’ discount available for the first Harmonic Elliott Wave webinars available

Tuesday, January 4, 2011

Still not 100% clear but the Dollar upside does seem favored…

Some of yesterday went much better than I had expected for the first day back... I can’t see that there is a totally confirmed Dollar bullish signal at the moment and in some cases there is still a bearish argument, but I do have a slight preference for Dollar gains. This is derived mainly from AUDUSD and to a certain extent GBPUSD which both appear to have had a more significant bearish move yesterday.

The other two Europeans are more mixed with EURUSD stalling perfectly at 1.3250 which could be interpreted as bullish while USDCHF really didn’t commit to either direction but does seem to have cornered itself in terms of causing a rather messy structure that tends to argue against losses…

It’s still going to be worth taking some care today but also worth noting that if I am right then the implication is quite strongly bullish Dollars as the situation in USDCHF does resemble a situation where it could completely recycle the decline from 1.0065…

We need to bring USDJPY into the equation also. It has squeezed a little higher than I actually feel comfortable with but with EURJPY having stalled perfectly at the 109.25 resistance I highlighted yesterday the two together, while yesterday’s highs hold, do still seem to point to lower levels although the targets for both EURJPY and USDJPY do appear to suggest that EURUSD shouldn’t really move very far from current levels. Clearly there is still some confusion and I feel we need watch this love-triangle to see which one cheats the most…

However, one thing about the USDJPY/EURJPY structure... If they both reach target then the corrections should be quite solid, USDJPY more so, and that still points to a lower EURUSD over the next week or two.

USDCAD seems to have found a temporary low… but I don’t see it holding for too long…

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

Early birds’ discount available for the first Harmonic Elliott Wave webinars available

Monday, January 3, 2011

There is reason to start the year with an element of caution

May I wish everyone peace, happiness, health and wealth for the coming year.

It was interesting coming back to look at the charts for the first time. The depth of the recoveries in GBPUSD and EURUSD obviously raised my eyebrows. When actually getting down to measuring wave relationships, the impact of reduced liquidity was clear. Normal trending projections frequently saw excessive moves while the final legs had been compacted in quite a few cases. The problem I have is knowing how soon normality will resume. It is quite common for the market to rein back on pushing the Dollar one way ahead of the Xmas break but then jump on the bandwagon in the run into the New Year. Clearly, this hasn’t been the case this year which perhaps highlights the general mixed outlook regarding the weak outlook across the globe. It is not a case of which center is the strongest but more a competition to see which is the weakest…

From my own perspective the drop in both USDJPY and USDCHF actually fits into my long term cycles quite comfortably. I’m not convinced *yet* that these trends will extend too far immediately but do represent the overall expectation I have for the coming year. Where I have more problems is in GBPUSD and EURUSD where the losses seen have confused the picture somewhat. I am not convinced that they have completed the decline and that causes some immediate uncertainty for me. The stressed wave relationships I am seeing also generate some uncertainties for the coming week or two and therefore I shall be taking a more balanced view until there is more clarity.

However, from the depth of the corrections in GBPUSD and EURUSD it does push me slightly more in favor of an eventual Dollar bearish outlook but does still retain the potential for one more low in GBPUSD at least. I note that AUDUSD seems to be suggesting a similar start to the year while USDCAD is threatening to break below last year’s low which would extend losses considerably.

If there is any one currency pair that did perform close to expectations over the past 2 weeks then it is EURJPY… This pair is still in a downtrend and should continue although the potential for more frequent corrections is possible.

Thus, take the New Year trading with care. I have reduced confidence in the support & resistance until I see the wave relationships moving back to more normal ratios.

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

Have a profitable week.
Ian Copsey

Early birds’ discount available for the first Harmonic Elliott Wave webinars available