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HARMONIC ELLIOTT WAVE

Monday, February 28, 2011

The Dollar still looks vulnerable overall but some care is needed at this point…

Friday saw a stronger than expected EURUSD but this Dollar weakness wasn’t reflected in its European buddies. I am pretty much in two minds at this point. I still feel there are Euro gains to be seen but on the other hand I am aware of the need for a deeper pullback before long as the intermediate upside targets appear to be getting very close to the ultimate target – back to around the 1.4281 high… I have to balance this with the need for deeper losses in GBPUSD now and a little uncertainty on the downside in USDCHF…

Within the Dollar decline so far I have attempted to identify the structure but it has been rather complicated and there are some signs in USDCHF that a deeper correction is due – still within an underlying Dollar bearish move and therefore acknowledging the risk of a possible pullback… In effect, it’s just the balancing of the shorter term development into what I feel should be the more medium term expectations.

USDJPY is pretty much in the same situation. It has seen a fairly direct decline and I sense there should be one more dip today but with the risk of hourly & 4-hour bullish divergences developing for a correction. This would be quite a healthy development and one that would prepare for a launch on the historic low at 79.70. This next attempt has a much stronger chance of breaking through.

This still keeps EURJPY is rather a finely balanced situation. I don’t really like the manner in which the drop from 114.23 has developed – in terms of this being a more direct break lower. Key support is not too much lower so we’ll have to keep this in mind – and probably that EURUSD has to be the one that takes it higher in all probability…

Coming back to the situation in AUDUSD I can also see that it has continued to labor in its rally to the point where I have strong doubts that it will be able to overcome the 1.0256 high by too much – maybe just above 1.0300 but does seem to be crying out for the correction to recycle back to 0.9803… USDCAD has similarly not quite developed as I had been expecting and actually appears to be a lot more bearish than I had been projecting…

Thus, take the first moves this week with care…

Have a profitable week
Ian Copsey

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Friday, February 25, 2011

More of the same…

Yesterday saw a more uniform decline in the Dollar, or just about. It wasn’t quite as planned but the day confirmed USDJPY as having joined the central bearish theme and also that USDCHF has a more direct route lower also. There’s still more to go with, of course, the occasional pullback.

In fact I expect today to be somewhat similar with the first reaction to be a correction higher but without too much power and followed by another leg lower for the Dollar. This should lead to a break above the 1.3860 high but which is not expected to be sustained and instead trigger a deeper correction so over the coming week the Dollar should look a little firmer.

USDJPY has confirmed its association with losses and does seem destined to retest the 80.23 low. It should stall just above – or even just below – but I doubt we’ll see new historic lows just at this point. It should happen later though.

This has provided a weaker EURJPY. It still seems to be somewhat supported but unless it can recover firmly the downside is beginning to look a lot more vulnerable… We still need to exercise some short term care here but I feel this should get resolved before too long.

Just one final word on GBPUSD. It did extend losses as outlined in the downside scenario yesterday. However, I can’t see any particular strong basing information from momentum. It really does need to remain above 1.6084 otherwise there seems to be risk of a stronger drop…

Have a great weekend
Ian Copsey

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Thursday, February 24, 2011

Dollar downside back on track…

Yesterday went a bit better and saw the Dollar reach the next target areas. It should lead to some modest corrections but there appears to be some conflicts around that we need to note and watch. The main one of these is between EURUSD and USDCHF. It may be fortuitous since these two seem to see many more occasions where they diverge in terms of correlation. However, this should definitely be watched since it seems to me that USDCHF requires quite a solid pullback compared to a minor one in EURUSD. If there is any way this can resolve itself then it should be that both correct initially but as EURUSD rallies to new highs USDCHF remains fairly static. The key is that the next high in EURUSD should then generate a deeper correction where USDCHF can resume its deeper correction…

A point on GBPUSD also: Its failure to break above 1.6277 was rather a disappointment and sets up its own conflict with EURUSD. There appears to be little room for a pullback but the next leg higher needs to develop. I think we’ll need to observe the next move as we may be seeing a flat correction. I remain bullish but need to navigate this current conflict.

USDJPY… Hmmm… this one is rather tricky too. With yesterday’s deeper than expected loss it would be easy to turn and confirm losses. The problem I have is the extreme degree of choppiness and what appears to be a corrective structure that would maintain its decline. I’m going to remain open on this one and probably follow EURJPY as a tool to decipher this one. However, there is a key resistance area that will need watching and failure to overcome this may well end up provoking further losses.

EURJPY itself hasn’t really generated a clear cut picture either. I still cautiously favor the upside but this is one to work with breaks and may well be decided by this resistance area in USDJPY also.

Overall I feel a Dollar bearish day but keep a keen eye out for how these conflicts resolve themselves.

Good luck
Ian Copsey

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Wednesday, February 23, 2011

Not quite time to give up on a lower Dollar…

Yesterday was “one of those days” … pretty much a disaster. The easy thing to do is turn back to a bullish Dollar. Maybe that’ll prove correct but not everything went right for a bullish Dollar either. USDJPY has slipped further than I had expected … and USDCHF didn’t really flinch at the moves elsewhere to keep it more firmly on the bearish side.

Exploring the Dollar bearish side there are still some potential conflicts to resolve. There seems little room on the downside in this current move lower. However, in its European counterparts there’s a comparatively stronger rally required to the next pullback point. Considering the rather controlled decline in USDCHF that may not be a problem but we’ll need it to correct quite firmly once this decline is over and if the bear side is to occur this element will need close attention.

And what of the Dollar bullish side? Well, I could take a bullish USDJPY but it’s pretty tough to conceive a structure to support a bullish USDCHF. If anything it’s this element that keeps me in retaining a more Dollar bearish view. Well, that and the multi-year cycles…

On USDJPY I am pretty balanced. In the larger picture I am firmly bearish. However, a current bullish rally would make the structure fit more snugly. So on the one hand I prefer the Dollar bullish side but also aware of the larger bearish cycles. Perhaps much will depend on EURJPY which, if I adjust my perception could still be within a rally but I feel we may need to allow for a period of consolidation. This could still be a key element in identifying the underlying direction…

Having had my fingers burned badly yesterday I’ll be more cautious today. If I have any preference then it’s still Dollar bearish but perhaps one step at a time today…

Good luck
Ian Copsey

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Tuesday, February 22, 2011

Signs seem to be pointing to a lower Dollar

Friday saw Dollar weakness which, while stretching the Dollar bullish scenario in the majority of currency pairs, has really begun to firm up more of a bearish outlook. USDCHF has dipped just too low now and GBPUSD almost back to the 1.6277 high… EURUSD, in terms of a possible retracement could still be argued to be remaining in a bearish structure but the overwhelming evidence suggests to the contrary.

I took a while over the weekend taking a look at the longer term charts. I have always been Dollar bearish and see no change. The only question mark that remained was whether we in the final descent or whether there could be an intermediate pullback. It seems more likely that the bearish cycles are pressing their influence already.

Now, in saying this I’ll point out that we’re in a position where this decline should extend towards the 1.4281 high – or thereabouts – and then imply a much deeper correction. This is also reflected in USDCHF also though it should extend some way below 0.9300. GBPUSD is in an upward mode but still apparently some way from its final peak and may just become more complex as time goes by – but basically expecting a rally still.

There is one exception, I feel among all tis – USDJPY. Well, at this point, let’s just say “potentially.” I still feel this is showing more bullish tendencies but within what may be a rather choppy rally. We’ll have to see whether the balance works but it’s not impossible for this pair to consolidate while the others see Dollar losses and this tends to be borne out, to a certain degree, in EURJPY. However, we’ll have to watch supports in USDJPY closely as in the longer picture this does also look very bearish.

For today I feel we’ll probably be seeing Dollar losses extend, not excessively but overall with a bearish bias and probably needing until Thursday or maybe even Friday before we achieve the 1.3860 high again.

Have a profitable week
Ian Copsey

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Friday, February 18, 2011

As clear as mud…

Please note that since Monday is President’s Day in the States the next report will be on Tuesday


The Dollar maintained its losses but hardly with any significant follow-through. In some ways it would be easy to declare that this should trigger a more robust decline but I do still feel some hesitancy. If there was any single argument to the contrary then it may well be in AUDUSD. However, perhaps the strongest evidence of a Dollar low being seen is in USDCAD which has been following its bearish structure almost perfectly but now within a breath of establishing a low.

It’s a long States weekend. Another interesting point to note is the Dow Jones Industrial Average which has reached the target I identified in Monday’s Outlook. This resistance area at 12,335 is one that, assuming I am right, should prompt a 450-500 point drop. I have no idea what the catalyst may be but does suggest a certain reaction that should cause a shift in currencies also.

For today I have to take a balanced view. I still have a slight urge to remain Dollar bullish but we are right on a fine line between bullish & bearish and therefore I feel that a prudent approach is recommended.

Take care.

Have a great long weekend
Ian Copsey

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Thursday, February 17, 2011

To make a decisive move or not to make a decisive mood is now the question…

This has all become very messy… Yesterday saw very little of what I was looking for but really didn’t make any decisive move in the opposite direction either. Well, there were a few exceptions in terms of depth of pullback but these didn’t really generate any breaks on which to ride on a trend. It has left me having to resort to less common structures in both Dollar bullish and bearish scenarios, a factor that is normally provoked by complex corrective structures that hide the underlying intent.

Having reworked a few structures I do see that where USDCHF ended this morning actually looks more positive but in USDJPY the situation appears to require a deeper pullback before it can extend higher… EURUSD provided a bit of a “klutz” move which really sits smack in the middle of the upside and downside risks. But GBPUSD crashed only to recover quite firmly but not enough to generate clarity.

I can keep repeating a few more similar phrases but I think the message is fairly clear… It’s mighty messy out there in Forex-land and there needs to be some stronger indication provided. From that perspective I feel we should take the back seat today and observe first to get an idea of where the break will come.

If I have any preference then I’m still a bit more on the Dollar bullish side though still nursing the deviation from expectations yesterday.

Good luck
Ian Copsey

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Wednesday, February 16, 2011

To correlate or not to correlate… that is the question…

…and I’m not sure of the answer…

Yesterday provided a mixed bag of individual moves but it seems to me as if there is a common theme developing but may take until tomorrow or Friday to see a uniform end result. Overall there seems to be a growing convergence towards Dollar gains but at this point not quite all currencies are apparently prepared to conform to this…

One more that was added to the pot yesterday was AUDUSD with its decline which has extended this morning and seems to be heading lower. USDCAD had a sideways day but sets up the same outcome – a move to minor new lows which should be followed by a deeper recovery higher.

USDJPY progressed nicely, albeit it at its own pace while USDCHF has reached the higher end of the support area I have been touting. It may just dip a little more and probably I favor that but it’s very much in line with a bullish Dollar.

That leaves us with the prime European pair… GBPUSD and EURUSD. Frankly, while GBPUSD rallied yesterday it really was in a bit of a messy manner which doesn’t engender much confidence and actually tends to point to it being a correction rather than a more directional rally…

So what of EURUSD… Ahhh, this is interesting… The recovery to just below the 1.3557 high could be seen as a correction and still allow the drop to my target. The interesting point about this rally is that the correction has been in a manner which could be treated as a complete correction but could also trigger one more corrective pattern high. If that’s the case then EURUSD will also fall into the Dollar bullish camp…

One more thing to watch is EURJPY… itself pretty much in the balance but may rely on the outcome of EURUSD…

All eyes are on the first move in EURUSD today in that case…

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

Good luck
Ian Copsey

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Tuesday, February 15, 2011

We should start seeing some stronger movement by the end of today

In many ways I am satisfied with yesterday’s developments. However, if these continue to develop as outlined a rather bigger issue will raise its head. I have been looking for EURUSD to find a low and rallying. What I had in mind yesterday was for USDJPY and USDCHF to push higher more promptly to see overall moves become correlated but this failed to materialize. Clearly something has got to give unless we’re to see EURUSD to move of its own accord.

The failure for GBPUSD to move lower has also concerned. I reacted yesterday to the rallies in USDJPY and USDCHF and also to the picture in the larger time frame and I have always had a mild preference to see these two rally quite strongly. Very clearly there’s a conflict. Either EURUSD and GBPUSD have to decline more aggressively than I had thought or USDCHF and USDJPY have to recycle back to their respective lows…

Therefore it’s going to be an interesting day to see which scenario is going to play through. I can see individual arguments from both sides. In many ways the decline in GBPUSD appears too deep to permit another push higher but then its decline has hardly been strong. EURUSD has quite good support – and a zone which may be used as a break level but the bullish divergences look quite firm. However, we don’t really have bearish divergences in USDJPY and USDCHF…

Any clues elsewhere? Well, EURJPY actually did pretty well yesterday and seems to be following the intermediate triangle that should keep it in a sideways consolidation for another 2-3 days. That in itself suggests that we should see USDJPY and EURUSD remain fairly well correlated but with the Euro losing out against the Yen mildly over that period. Will that be from a weaker than expected Euro or USDJPY?

Elsewhere USDCAD seems quite close to finding a bottom. It’s messing around just a little but once it gets below 0.9800 it shouldn’t take long to bounce right back. AUDUSD also has fallen into range trading and needs to start higher quickly if it’s to break in one direction or the other…

Watch levels closely today and bear in mind the impact of correlation – or lack thereof…

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

Good luck
Ian Copsey

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Monday, February 14, 2011

Friday’s moves suggest we’re going to get a stronger Dollar but it won’t be direct…

Friday looks to have sorted out the wheat from the chaff. The key signals came from all four majors but more precisely from USDJPY, USDCHF and GBPUSD. All broke Dollar resistances that could have kept them in trading ranges and appear to have opened the way for gains over the medium term. However, while there should be further strength seen today and perhaps into tomorrow the current move is approaching completion.

These should cause corrections in all four but EURUSD does still stand out as a possible black sheep of the family. I am open to what happens but the decline this currency will make today will probably leave it in the balance and one that would still retain the potential for new highs. The key will be the relative movement across the four…

For today the risk appears to be for a mild pullback to Friday’s gains. Not by too much but I can’t see that we’ve seen a completed correction yet. Once that’s over with then we can plan the next rally and for the subsequent correction.

Just touching on EURJPY as I feel this may point to the a possible divergence of movement between the two intrinsic currency pairs, it seems to me as if the cross has stumbled in its attempt to push higher. I can’t see a massive reversal but more a period of range trading above the 110.77 low. With USDJPY looking quite bullish for the medium term I will expect a break higher at some point but probably not until the anticipated Dollar correction is complete.

One other point for the followers of U.S. equities, it looks very much as if we’ll see an intermediate high in the Dow & S&P this week – and my targets are at 12,325-3355 and 1,345-50 respectively. These highs should spurn drops of 450-550 points and 120-140 points respectively… It does suggest something is afoot…

So, look for Dollar buying levels midway through today and for the final push higher of this section of the Dollar rally.

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

Have a profitable week
Ian Copsey

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Friday, February 11, 2011

It looks like another critical day today…

What a mixed bag yesterday was… EURUSD gave up… slipped through the 1.3667-76 lows and extended losses. On the face of it that should send the Dollar higher. However, always in the back of my mind I also had the upside barriers in USDCHF at 0.9696-0.9739, in USDJPY at 83.30-67 and EURJPY at 113.23-53. Well, bingo… that’s where they are now roughly.

At the same time, I can’t really find a particularly constructive set of wave relationships in the Euro’s decline. Theoretically this should imply losses below 1.3507 but we’re getting hourly bullish divergences to match the bearish in USDCHF. To cap all that GBPUSD refused to jump on the bandwagon. I had almost given up on the 1.6010 support but clearly there was an aversion to additional losses right at that level…

So is the Dollar bearish or bullish? Good question…

Well, confining myself to USDJPY only at this point, the hourly bearish divergence is not that strong and 4-hour momentum is looking pretty determinedly bullish. There are still the 83.67 and 84.50 highs to surpass but it actually looks as if it wants to have a good try…

Elsewhere, the Europeans are determinedly confused… Momentum is tending to suggest Dollar weakness and if that’s the case EURJPY should find the 113.53 resistance a breeze. That’ll be one clue though of course its fate may well be decided by USDJPY. Another key level for me is yesterday’s 1.6009 GBPUSD low. That will need to break to put a final end to the upside – or on the other side of the coin a break above 1.6140 & 1.6184 would risk sending it skyward again.

As for EURUSD and USDCHF… well, given the Dollar bearish divergences I’ll await breaks… However, if USDCHF manages to surpass the resistance levels I’ve laid down it could hang on to USDJPY’s coattails and thus also send EURUSD lower also…

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

Have a great weekend
Ian Copsey

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Thursday, February 10, 2011

It ain’t over till the fat lady sings… but keep your ears open today

The Dollar lost out yesterday, the rally in EURUSD modestly impressive, the drop in USDCHF expected. But the pattern of Dollar weakness wasn’t totally uniform with USDJPY rallying while GBPUSD and AUDUSD really failing to take advantage.

When I look at EURUSD I can make out a bullish structure but it stretches the imagination rather – a bit like standard Elliott Wave fantasy guesses you see splattered around the internet – so I’m not really getting too excited about seeing the Dollar downtrend resume. I can’t 100% rule it out but I’ll wait for it to confirm a little more. The problem here is the hourly bearish divergence in EURUSD that takes away the gloss of my imaginative count, as much as it has some fairly decent wave relationships…

So what of the Dollar upside? Well, there are some inconsistencies here too. It wouldn’t take much for EURUSD to extend its losses. I tend to prefer seeing USDCHF rally also. Now, what does concern is that both GBPUSD and AUDUSD are sitting right on top of key supports. These two have virtually no wriggle room for losses now. In other words, much below their recent respective lows would appear to suggest a total reversal.

The reverse argument is that perhaps these two on their supports are suggesting the Dollar losses will continue… Well, they have to do so promptly otherwise that wriggle room will slip behind them in a brief whisper of breeze… One more harbinger of EURUSD gloom is EURJPY. It rallied quite consistently yesterday but not in a manner that points to immediate follow-through higher. Instead it looks like remaining in the recent range and that probably reflects a lower EURUSD…

So if I’m to plump for anything today then it’s a higher Dollar but in spite of the warnings being flagged by GBPUSD and AUDUSD I’ll refrain from total breakdown of the Dollar downside and note there are still key Dollar resistance levels to break and until they do I’ll be watching closely…

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

Good luck
Ian Copsey

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Wednesday, February 9, 2011

I think today could be important in defining the next move…

It was another day of only partial success. While EURUSD made gains over the day they were grudging. Elsewhere the Dollar slipped against the Yen but gained against the Swissie while GBPUSD hiccupped and slipped to a minor new low. Even AUDUSD, which I had thought to have a decent bullish structure, made heave work of gains and actually subsided into a game of seesawing within range.

The sum total is a mixed bag of signals that really doesn’t confirm Dollar losses, but then I don’t think they confirm gains either. For a start USDCHF seems to be happily edging higher but seemingly within the larger range that I highlighted yesterday. If anything, on its own, it tends to confirm Dollar losses but not particularly quickly with another leg higher still to come.

What of EURUSD? Well, it struggled higher rather than brazenly signal a resumption of the upside. It has left me sitting on the fence, particularly with GBPUSD having dipped below 1.6036 and beginning to look a little vulnerable.

USDJPY saw a sell off but appears to have steadied itself and does look a little more bullish. This is partly confirmed by EURJPY but it’s recovery has been rather limp and only serves to make me cautious about the next move.

The bottom line is that there is little – if any room – on the Dollar’s upside available without pushing it towards a stronger bullish structure. Therefore I feel that what happens today could prove to be important. I suspect broad Dollar strength today so the important issue will be just whether the market can take advantage of this to penetrate key resistance levels all round.

It’s a day to be cautious so take care…

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

Good luck
Ian Copsey

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Tuesday, February 8, 2011

I’m seeing signs of Dollar losses today

To a certain extent things went my way yesterday but without the stronger follow-through higher for the Dollar. The marginal new low in EURUSD has deepened the bullish divergences there while the slightly stronger rally in GBPUSD has brought a certain degree of stability.

If I look at the Europeans I can see reasons for Dollar losses. If I look at AUDUSD I see the same. One of the question marks in my mind yesterday was the apparent strong bullish structure in AUDUSD, that is, one that would see significant gains over the next week or two. With the combination of the bullish divergences in EURUSD, the low in GBPUSD together with the strong AUDUSD and even EURJPY outlooks I feel that at the very least all of these should see gains today.

To be cautious we’ll see how these develop but I also see potential for yesterday’s low in EURUSD to be the end of the correction. That requires a mild shift of perception on USDCHF and possibly USDJPY. Certainly I can see potential in USDCHF particularly with the failure to break above 0.9622. However, it will imply a more restrained decline and this will be one of the key points to look for.

As for USDJPY… the situation is less clear. As I have always indicated the long term picture is bearish. What we are seeing now is part of a correction and there remains a question mark over how this correction develops. However, with the expected strength in EURJPY it wouldn’t surprise me to see USDJPY remain within a sideways consolidation briefly.

So, for today I do see more potential for Dollar losses. The first part of the day should see mild follow-through but be aware of the need for a correction before they can follow-through. I do feel that we’ll be seeing a lower Dollar by the end of the day.

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

Good luck
Ian Copsey

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Monday, February 7, 2011

At this point I think we’re seeing a correction only…

While I have been able to work with the 1.3860 high and pullback in EURUSD, I had voiced concerns over the impact of any deeper retracement in USDCHF and USDJPY. These two appeared to suggest that if they broke the highs prior to the NFP that the upside would look a lot stronger. Well, they should move higher, and EURUSD lower but on looking back, for the other two, there is risk of a sideways consolidation and this could still fit into just a correction in EURUSD.

What this does present to us is a stronger identifiable band of Dollar resistance across all three currency pairs which will become a crucial pivotal point between Dollar bullish & bearish. These levels are likely to be reached either by late today or into tomorrow. So whatever happens, the rest of the week promises a stronger directional move.

Now, I have made mention of three out of the four majors… What of GBPUSD? Now there lies a slightly bigger puzzle. Ideally, unlike the other three, I wouldn’t want to see any further losses… The decline from 1.6277 does look more corrective to me but from the view of ratios it’s not that far away from being a start to a stronger bearish move… It’s this one that keeps me slightly on the sidelines and retaining a more “wait & see” attitude to assess the next moves before deciding – and at the end of the day will probably work in with the pivotal Dollar resistances in the other three.

If anything I still err on the side of Dollar bearish due to the just about perfect development in AUDUSD which still looks bullish while USDCAD looks bearish overall.

The only other pair to note is EURJPY… Now that has bounced well from the area I had expected. As long as Friday’s low now remains intact the implication remains bullish. Clearly that implies that either EURUSD or USDJPY will rally strongly… or of course both. I think we’ll be able to use the 110.77 low as a key indicator to something more directional happening elsewhere…

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

Have a profitable week
Ian Copsey

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Friday, February 4, 2011

Time for a rethink…

The past two day’s have blunted my Dollar bearish argument considerably. The only two currency pairs that moved close to forecast are GBPUSD and AUDUSD. Those alone provide me with stronger reasons to retain the view. However, EURUSD failed miserably while USDJPY and USDCHF made gains they are left in a tantalizing area of indecision. To be honest, even with EURUSD the rally hasn’t totally broken down and I can still see wave relationships that would imply a target at 1.3940-45 but the drop has been sufficient to take the warmness from the call.

Well, it is one of those days today… you know, the “hold on tight as the market rips out your guts and puts them back again – but not necessarily in the same position” day… aka Non Farm Payrolls release day… These are days to expect the unexpected… but I’m now not sure what to expect.

However, there are some clear break levels for the Dollar decline and as a basic start to making decisions these should be watched with care. As I mentioned, while not entirely going as I had expected GBPUSD has been left rather unscathed and the bullish structure most certainly in place. It may have found its low though there is room for further minor slippage. If the key support breaks here then I’ll throw in the towel. The same is true of AUDUSD although this is due a bit of a pullback – not too far – but as long as it holds supports this too remains quite bullish.

Elsewhere USDCAD appears close to a retracement resistance and should see losses. EURJPY has also declined much as I had looked for… I have a fairly balanced view here between bullish & bearish, perhaps slightly more biased to the upside. This bias would still allow a marginal new low but then we need a more decisive decision being made – either it will drop to 108.10 or rally to 115.67… such is the extreme difference between the two…

So, it’s a day for observation into the NFP figures tonight. Watch key Dollar resistance levels and be aware that while these hold the Dollar remains in quite a finely balance moment but one which should define the much larger picture for the coming month or so…

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

Have a great weekend
Ian Copsey

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Thursday, February 3, 2011

The Dollar should remain under pressure

I can’t say yesterday’s analysis was that accurate. Instead it was a day of graft but not really seeing the recent Dollar losses coming under too much threat. Having made a retake on the situation my basic view remains unchanged but note a slightly different structural development than I had anticipated. The core larger Dollar bearish structure remains intact and with momentum regrouping following the stronger breaks I still feel we’ll see one more leg in the current decline before a slightly deeper and longer correction.

It’s this next correction that will test just how robust the Dollar decline is. I mentioned earlier in the week that the Dollar bearish cycles are in the final months of a mega-super-massive-extra multi-year decline that I estimate should arrive +/- 3-6 months around the turn of the year. If there is any chance of a brief reprieve then this will be it.

If not… and the way things are developing we’re going to see a pretty directional move for the rest of the year. What will cause it? Why would I know? I never look at the fundamentals as they tend to lag… Call them a self-fulfilling prophecy if you like… but retrospectively self fulfilling… (Just a technical analyst’s perspective of course!)

So today I feel will be mainly Dollar bearish as the corrections look complete. I have some doubts about USDCHF but even this could still see a marginal new low but then pullback higher in a recycling. Elsewhere the situation is pretty uniform in terms of needing another dip. This should keep EURJPY on the defensive, and I’m even open to one more minor push higher but within the boundaries of a deeper pullback lower. This one is more of a flip of the coin but I still feel one way or the other we should see a lower low that the 111.41 seen thus far.

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

Good luck
Ian Copsey

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Wednesday, February 2, 2011

No Dollar low in sight… well, not yet…

All change… Yesterday’s Dollar losses are enough to break the structure I had held for some while and could well be the beginning of the end. The end should be some where around the end of the year now. However, that’s not to say that we’ll not see any correction but I suspect with the monthly cycles being in the final months of what may be a 20-25 year bearish cycle it tends to point to a pretty luckless year for the Dollar.

Well, that’s still a little way beyond the current position and first things first we need handle this current move. I suspect that we will eventually retest somewhere around the 1.4281 high EURUSD before a larger correction. Perhaps to put that in perspective also we should see an intermediate pullback before too long now and it’s from that (anticipated) corrective low that we’ll end up closer to 1.4281…

Yesterday probably saw the most aggressive part of the move. There’s still a little way to go but with greater risk of a less direct move. GBPUSD has confirmed this also and that isn’t too far from testing last year’s 1.6298 high. That shouldn’t be the last stop either… The last bastions of defending a Dollar bullish correction – USDCHF and USDJPY – also lost sufficient ground for me to consider that the downside is developing directly.

However, in all the structures there is a defined limit for the current Dollar losses and I suspect that these may be achieved by next month – latest into April. Thus, it is from the lows expected then that a pullback is possible.

Both AUDUSD and USDCAD had Dollar bearish days and appear to confirm exactly the same picture. It’s more a matter of navigating the near term.

That leaves EURJPY which was sidelined somewhat as the Dollar moves took over. I still cautiously see this as bullish but would actually prefer a dip first so yesterday’s strength was rather against my expectations. While the Dollar moves dominate it may be better to observe rather than dabble…

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

Good luck
Ian Copsey

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Tuesday, February 1, 2011

So far… not so good…

No, no no… that wasn’t meant to happen… bad market… BAD market… Sit! Beg! Actually, those last two words were aimed at me… Well, yesterday’s moves have forced me to sit back and think again. What do we have?

Bearish Dollar: The strength in EURUSD and GBPUSD, failure for any meaningful strength in USDJPY & USDCHF, a strong AUDUSD, multi-year bearish cycles

Bullish Dollar: EURUSD & GBPUSD haven’t penetrated their highs, USDJPY & USDCHF holding support levels, Dollar Index not quite breaking the 77.47 support

In particular it seems too early for both USDJPY and USDCHF to continue its long term decline, though that’s a wholly subjective viewpoint but it’s one that does keep me sitting on the fence somewhat. Having said that, I’m not going to sit in the way of any further Dollar weakness should this develop further today given we should be in the final leg lower in a multi-decade Dollar bearish cycle. Anything that happens in between is merely cosmetic as far as I am concerned, making a structure fit more snugly.

Obviously, sitting on the fence also means there are limits to how far I can sway either way and identifying those limits is the core task I had in the analysis this morning. I’ll highlight those within the report so be aware of the impact of the breaks – whichever way they go. If this does extend the Dollar weakness then at this point I can’t see there’s any going back… In other words, the rest of the year will have a dominant bearish theme…

The only other point that may have an impact is that I feel we are very close to a major high in the Dow Jones Industrial Average. My favored target is between 12,285-12,335 with the anticipated correction lower expected to be around a full 20% price drop – so back close to 10,000… I estimate this should occur sometime next week and suggests some major change in sentiment. Quite what the market will make up as the excuse I don’t know… but I do feel quite strongly about this having called for this area in the middle of last year.

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. (+40 pips)

Good luck
Ian Copsey

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