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HARMONIC ELLIOTT WAVE

Thursday, March 31, 2011

There were some good calls yesterday but I’m not sure we can relax yet…

That was better… It was nice to follow a bad day with a good one. The highs in USDJPY, EURJPY and USDCHF all identified quite nicely. GBPUSD came quite close too but may not have quite completed the move…

Having congratulated myself I have to admit that there are a few things that make me nervous… In particular the reactions in the JPY pairs have not really filled me with the greatest of confidence and probably more with a sense of nervousness. Ideally these should both decline further, USDJPY fueling the decline in the cross. It seem s the most obvious outcome but we do have to take EURUSD into account…

So what is Dollar-Europe doing? Well, yesterday’s high in USDCHF has been a target since the 0.8918 low. The manner of the move higher also looks corrective so I’m pretty confident this can move to new lows over time… So will the Dollar losses here have any bearing on the other two? I’m not really sure that today will provide the answer. Correlation between these three has not been particularly reliable.

What about EURUSD? Well, that has confounded for the past 2 days and its failure after what I had thought to be a major top has not really been consistent with the normal reaction to initial key retracement targets. This is causing me quite a degree of concern. Back to GBPUSD, I was staring at the daily chart which is still a bit challenging and saw a potential structure that could indicate that the 1.5936 low was a final one… I certainly think GBPUSD can edge higher again today but there’s key resistance just ahead and I don’t think it’s going to break today so we’ll have to observe the pullback…

Further Dollar losses across the board may still be a risk… and with my underlying view on gold remaining bullish for a short while longer this outcome would be quite consistent.

So, in summary, I think today will probably not bring any final conclusion to this puzzle and it will more likely be a more tight range day for the Europeans. For the JPY pairs I am more open and will react as further developments occur. However, I have a sense that the moves may not yet be over…

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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Wednesday, March 30, 2011

More reason to be cautious today…

Not a good day yesterday… and not a lot went right which means I’m not a happy bunny today…

Where do I start? Well, I’d rather forget EURUSD… but clearly I can’t. The extension of the gains to 1.4148 was clearly not on the agenda but now I have to work out what to do with this. Frankly the balance between the Europeans has become somewhat shaky for the moment and the air needs to be cleared. I still have a firm view on what I feel is the correction higher in USDCHF and I don’t think this is complete yet. It still has a little higher to go I think but I’m not sure this will be direct which suggests a rather scrappy ending to the pullback. However, once complete it should sink to new lows…

So will there be any correlation with EURUSD when the Swissie finally declines? To be honest the once high probability of correlation has descended into a rather shaky marital relationship. Sometimes they love it other and sometimes they can’t bear the sight of each other. It’s not something that is predictable any more.

So what of GBPUSD? Well, while it didn’t extend its recovery yesterday, nor did it complete its own pullback and I tend to feel this should happen today. Once that is complete I feel that EURUSD can join in with the anticipated decline… This could keep EURUSD rather a guessing game for today…

What did develop at long last after a long time of waiting was a directional move in both USDJPY and EURJPY. It comes as a relief to actually get some price development with which to work on wave relationships… I still have higher highs in both to come. However, equally both appear to require a pullback before reaching the expected targets. The eventual outcome is that once the corrections and new highs have been seen the next reaction should be deeper corrections for them both.

So today looks as if the main risk is still volatility in both Europeans and the JPY pairs. Be aware of the medium term targets and implications to guide during this process…

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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Tuesday, March 29, 2011

Still a bit more to go for the Dollar

With the exception of GBPUSD the Dollar continued its pullback yesterday. In many ways this was in line with the development I expected except it developed much slower than I had looked for. That means the basic message expressed yesterday for further Dollar gains to develop remains the same but having reached the pullback area in EURUSD today should see the follow-through higher.

However, just as the Europeans saw a mixed bag of reactions yesterday the same appears to be possible today. The deeper decline in GBPUSD does need its own correction higher. At the same time USDCHF stalled at an in-between area – not quite satisfying the targets for bullish correction but having done enough to require an intermediate pullback lower before it can muster the strength for what I feel will be the final leg higher. The only risk I could envisage for EURUSD is that it maintains a sideways consolidation but not a new corrective high I feel…

AUDUSD should also now join the Europeans in a Dollar bullish move. I don’t think we’ve seen the final high for the Aussie just yet but it is in need of a deeper correction now. That should also brush off on USDCAD which itself requires a firmer move back higher.

That leaves USDJPY and EURJPY… The ranges have widened at least but overall there hasn’t been any particular strong indication of follow-through higher. If it is going to happen then it should do so today. In normal conditions I’d say that both have not really done enough to fit snugly into a bullish structure but given the length of the consolidation it really does stretch the imagination. I can’t rule out the upside completely but the odds don’t favor it. Indeed, if the cross is to rally, given the bearish EURUSD picture I have painted it’s going to need a very firm USDJPY to extend gains in the cross. Never say never… but “nev” is probably closer…

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, March 28, 2011

Dollar strength back on track it seems…

It seems I clearly made an error in judging the original decline from the 1.4247 EURUSD high as Friday saw a fairly persistent return to losses which have dropped below last week’s 1.4052 low already. After finding USDCHF hadn’t really inspired on the upside it actually found its legs and generated the strongest single day rally since the 0.8918 low. The third European also followed suit in seeing losses that are once again poised just above the 1.5976 low.

The news is that none of them appear to have completed their moves and while corrections are expected soon I still feel there’ll be follow-through over the next couple of days at least.

Even USDJPY managed to drag itself out of its drugged and coma-like state and on the 5-minute chart looked like it had shot out from the starting gate with great energy and venom. Of course, it was only 50 points… and basically insufficient to really make much headway which still leaves it vulnerable to the downside still. If I have any real view here then it is that we are probably not yet seeing the follow-through higher but could still easily dip back below the 80.65 low seen after the 81.98 high. This is probably echoed in EURJPY which, although it did manage to rustle up some strength, seems to have failed in doing enough to generate new highs at this point and may well have more downside potential later today.

The only pair that bucked the trend was AUDUSD which exceeded my initial upside targets and does look set for additional gains but probably needing a pullback before long. Thus, for today I feel the upside is limited.

Therefore, as we begin the week I feel we should be concentrating more on Dollar-Europe which still appears to have further gains in store for the Dollar…

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

U.S. TIME ZONE HARMONIC ELLIOTT WAVE WEBINARS PLANNED FOR EARLY APRIL
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Friday, March 25, 2011

Not what was expected… but still favor the Dollar upside for now…

Yesterday was a bit of a mixed bag in terms of direction but pretty much a horror for the forecasts. Early trading seemed to be banging the nail on the head as the Dollar began with gains but then all went haywire… EURUSD rallied much deeper than expected while GBPUSD declined more than expected and USDCHF stalled midway to target. None of them seemed to have read the script…

In particular the depth of the pullback in EURUSD is the one which has caused me most concern. The very best fit in terms of ratios suggests we saw a correction to 1.4052. That raises the alarm bells given the fact that I had been looking for a potential major high for a correction that should last for several weeks… The other fact that I still see potential for further losses in USDCHF is also nagging at the back of my head. Ok, these two have had an on and off relationship as far as correlation is concerned for some while but the target I have been eying is still 400 points lower…

So the number keypad suffered a great deal of beating this morning in an attempt to try and identify an alternative. I can’t say that I really found one. What does strike me overall is that GBPUSD seems close to a bounce – but one that should be only a correction before another leg lower. The other indicator for EURUSD is EURJPY which dipped mildly below my retracement target yesterday but not so significantly that it rules out the directly bullish argument. Now, that still needs confirmation and from the look of USDJPY it doesn’t look as if that will be the driver. It’s not impossible and after the whole of this week of seeing a 62 point range something has to give at some point… Which way appears to be more of a coin toss right now.

However, the cross, in conjunction with EURUSD and USDJPY could provide the trigger to clarify the situation in EURUSD. At this point I am still in favor of a stronger Dollar but with a caveat within a caveat within a caveat…

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

U.S. TIME ZONE HARMONIC ELLIOTT WAVE WEBINARS PLANNED FOR EARLY APRIL
CLICK HERE FOR MORE DETAILS

Thursday, March 24, 2011

Further Dollar gains expected…

In particular the outlook for EURUSD worked extremely well yesterday and at this point, as long as we don’t see any early recovery the prospect for this to extend its losses seems on track. There’s quite a bit more to go as well… This downturn for the Euro appears to have jabbed a spike in the side of the docile USDCHF which, in spite of the minor new corrective low I didn’t allow for, does seem to have, at last, to have awoken from its brief hibernation and managed to clamber higher as if someone stuck a sharp needle into its derriere… All’s good there and both should extend their individual moves over the course of today and into tomorrow.

Where I did kick myself a lot more yesterday was in GBPUSD. Having called the 1.6400 high I had a fit of doubt with short term momentum looking strong… I shouldn’t have doubted as it more led the way to drag EURUSD in its wake. It may have potential to stall and move sideways for a part of today but I can’t see this reversing higher right now. Too many bridges were burned yesterday…

So the Dollar has at last shown some mettle against the Europeans. As a generality I suspect this will continue but not without a deep pullback and this I suspect maybe the story for next week. However, the Dollar strength against the Europeans failed to have any impact on USDJPY… I’m watching EURJPY for signals here. Yesterday’s drop to 113.84 was quite positive but the recovery hasn’t confirmed any stronger follow-through yet. I can see risk of minor new lows in both USDJPY and the cross but we’re dabbling a little with key supports at a time when EURUSD is looking vulnerable. If the cross is to recover – which is my preference – then USDJPY needs to pull its socks up and get on with the business of rallying else we’ll see both JPY pairs begin to sink further…

Interestingly I was right about the Aussie, extending its gains and in defiance of the Dollar’s resurgence elsewhere still seems to have potential for a move closer to the 1.0200 high – probably won’t quite reach today though. USDCAD was positive also yesterday and should have further today but we may have to allow for a slightly deeper pullback before it gathers further upside momentum…

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

Good luck.
Ian Copsey

U.S. TIME ZONE HARMONIC ELLIOTT WAVE WEBINARS PLANNED FOR EARLY APRIL
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Wednesday, March 23, 2011

The market seems to be struggling for inspiration…

This week has been a bit like trying to squeeze blood from a stone… It seems to have prompted the market to concentrate on GBPUSD and AUDUSD both of which extended their rallies and in the process keeping short term momentum looking quite buoyant. These two actually look like extending those gains even further but doesn’t rule out an initial correction.

On the other hand EURUSD, which I had been looking to extend above the 1.4281 high, saw its rally peter out a little lower and appears to have raised the risk of a deeper pullback. It is approaching initial support areas but as long as yesterday’s high holds the risk does still seem to be lower.

This divergence of performance versus GBPUSD and AUDUSD does raise some surprise, even to the point of checking the daily structure. The rally from the 1.2858 low has done enough in terms of providing the basis for the larger Dollar bearish cycles to make their impact towards the end of the 2nd quarter or just into the 3rd quarter. However, I am keeping an eye out just in case I have misjudged the structure somewhere along the way which may lead to a minor extension still in this rally. Thus, while I am talking a correction right now this isn’t as clear cut as I would have liked.

As for USDJPY and USDCHF… patience is wearing thin… and getting thinner as much as the ranges are getting tighter. The more this happens the more the balance between bullish & bearish becomes strained and the risk of a sharp push and reversal possible. These two seem higher risk to me as the length of the consolidation adds confusion to the structures while momentum readings become almost irrelevant. I am more cautious about these two.

USDCAD should extend higher… EURJPY… I feel a correction lower only at this stage but that will mean USDJPY needs to buck up and start rallying…

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, March 22, 2011

Overall I feel the Dollar should display some strength – but not uniformly…

It was rather a strange day yesterday. In some parts it developed in the general manner I had expected but not really adhering to levels that well. In other parts it failed to ignite any significant movement. Mostly it could be described as quite a dull day.

The general impression I’m getting is that the Dollar appears to be supported in general. This wasn’t reflected in EURUSD, GBPUSD and AUDUSD but as described yesterday, I’m looking for a top to develop in the first two pairs and was surprised by the strength shown by the Aussie. However, I’m still adamant that USDCHF needs to retrace higher and edging more to the bullish side in USDJPY. The bigger issue for me is tying all these together in a manner which generates the least conflict in the general balance of things.

I should also mention that on reworking EURJPY I can see a potentially very bullish outcome. This may be assisted at first by a higher EURUSD but assuming I’m right that it won’t be sustainable then USDJPY has to take on more of the donkey work to keep the cross afloat.

So as a broad guideline to how I see this working I remain bullish EURUSD in the short term – maybe even just today – but which should then be followed by broad Dollar strength. This should come with a firmer USDJPY as there should be a little higher to come here too – along therefore with the cross – but then the JPY pairs should correct lower also.

There will still be hurdles to overcome as I still have USDCHF dipping to new lows but I’ll tackle that once we’ve seen the expected retracement higher first.

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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Monday, March 21, 2011

The Dollar has taken a more direct route…

The more indirect route I had expected in EURUSD in particular failed to materialize with the break above 1.3144 signaling further gains. Part of the reason I had opted for a more complex route was down to USDCHF which I have felt is due for additional losses. The way things have developed may well provide us with a much more confusing end to this move… Having said that it does seem to provide a little more sense to GBPUSD which probably will not see a high above 1.6343 now…

Just covering EURUSD first, as far as I can see we only have one more high to go before a larger correction. This should mean the first part of the day – and this could be through to NY trading – will see a pullback. Thus, the final high may come late today but we should allow for this to extend into tomorrow. I suspect that GBPUSD will map a similar route. What we will need in general is for correlation between these two and their European chum to break down. USDCHF, as far as I can see still needs a deeper correction higher…

Now, of even greater complexity is USDJPY… The pullback from the 86.31 low has taken me by surprise. Of course has rubbed off on EURJPY which has moved close to the 115.98 high. While frankly USDJPY can really be taken as a separate entity when talking about the Dollar in general, the overall wave structure raises a great deal of uncertainty. In terms of the larger cycles I still feel there are losses to come but given the G7 intervention last week it does seem difficult to be bearish right now unless a nuclear reactor blows its top – which is highly unlikely. The situation here in Tokyo is actually nowhere close to the negativity which has been fueled by the press.

The moves we have witnessed in both USDJPY and the cross are still rather difficult to interpret due to the relatively limited pullbacks and straight line rallies. Overall I am pretty open to either side but on the assumption that we will see a decline in the Euro over the coming week it would seem to edge USDJPY to the upside. However, the basic message is still “take care” as the outlook is not one of any great clarity…

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

Have a profitable week.
Ian Copsey

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Friday, March 18, 2011

Just a little more and we’ll start seeing some decent movement…

It was difficult to be exact yesterday as there were so many possible permutations to consider. However, broadly things seemed to develop as expected and brings with it a greater sense of confidence in what is currently happening. Yesterday’s key movers – USDJPY, EURJPY and USDCHF all lapsed into quivering wrecks and saw severely reduced ranges over the rest of the day. This allowed EURUSD and GBPUSD to express themselves more and seem to be heading back towards a likely return to correlation, probably at some point later today.

The rally in EURUSD may look as if it’s developing back into an uptrend but from what I can see the chances are limited. I am still basically Dollar bearish but can’t see that this trend will resume just yet. I am more in favor of a recycling in EURUSD and GBPUSD that should allow USDCHF to recover a little deeper to complete its correction from yesterday’s low. Once this occurs then the Dollar can see losses once again.

This tends to dovetail with gold and U.S. equities. Gold still has a little further to rally to a point where a bigger correction lower should develop. I have placed a call for a low in the S&P 500 around 1,240-45 that should allow the uptrend to resume. (http://stocktwits.com/HarmonicElliottWave) A lower Dollar will help in this cause.

USDJPY has shifted strongly higher as I write and this is clearly generates further need for greater attention. I’m not convinced this is going to begin soaring again but turn into a sideways consolidation. The moves are so sharp that for the moment it is probably safer to stay clear until normal service is resumes…

So for today keep your eyes out for the top in EURUSD and GBPUSD that should lead to a recycling lower and for USDCHF to rally.

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, March 17, 2011

Politics raises its head…

A morning clear of power cut threats… I’m a little late having to go through the analysis for USDJPY and USDCHF twice with the pre-Asia collapse in both provoked, it seems, by comments from the States about the radiation threat in Japan. I don’t normally take note of fundamentals but this one struck me as a typical method of politics taking advantage.

I have contacts who have been high ranking scientists in one of America’s highest organizations and with the power industry here. Both have confirmed that the radiation threat is minimal. Neither expects any disaster. The U.S. embassy personnel have not evacuated from Tokyo. I’ll leave it to you to make the difficult math of 2+2…

While I have always been bearish for both the pairs that collapsed I hadn’t expected it to develop quite at this pace. There’s still further to go but from this point I think the two of them probably need to stop and tread water to allow the other 2 majors to work through their corrections. I am expecting an eventual additional decline in the Dollar which should then be followed by a more sustainable correction. The development just described would allow all 4 majors to correlate to generate Dollar losses at the same time and to be followed by this anticipated larger correction…

However, what this will imply is that we’re going to enter into a rather complicated period of corrective and probably erratic price behavior. Already with the vertical lines in USDJPY and USDCHF it’s going to be a hard job trying to identify intermediate support & resistance and I’d suggest these two are avoided until the dust begins to settle. That will apply to EURJPY also.

Probably the better pairs to concentrate on are EURUSD, GBPUSD (still a bit complex) and AUDUSD…

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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Wednesday, March 16, 2011

Take care – currency pairs appear to be taking their individual routes…

Again, another day to be brief. We have power cuts scheduled for around 2 hours time and I have to organize some paperwork in order to prepare for evacuation from Tokyo. I hope you can excuse the shortened report on this basis. There may also be a day’s disruption if we get to fly out over the next few days.

Yesterday was and awful day… The only pair that really worked well was USDCHF. This still has a little duality about it but momentum remains bearish. It’s now more likely about how much this can retrace.

Elsewhere, EURUSD still appears to be on track for the 1.4035 high and maybe a touch above. I wouldn’t want to get too bullish beyond that unless there is a significant break. GBPUSD went in the opposite direction and while a pullback is possible, on the assumption that correlation returns that the expected recycling in EURUSD could see GBPUSD fall. We just have to manage the interim to confirm this.

USDJPY collapsed also but hasn’t yet made new lows. With EURJPY following behind we’ll have to be cautious still. I’m not totally comfortable with what’s happening there and feel we need to watch this carefully.

AUDUSD also collapsed and seems to want more. USDCAD soared higher and has clearly completed its decline sooner than I had thought. It does seem to have the potential for another one of its famous “I’m going to go nowhere” moments…

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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Tuesday, March 15, 2011

Mixed signals… but overall I’m becoming quite neutral…

I shall be brief today. The threatened power cuts require me to complete the report very quickly today and focus is on getting out the analysis.

Yesterday’s whippy start deteriorated into a rather languid uncertainty. If I look at EURUSD and GBPUSD it certainly looks as if the upside potential for them both is limited which tends to point to a sideways consolidation. I’m not so sure about USDCHF however, as this has potential for a more directly bearish move.

The divergence between these two sets doesn’t disturb too much and in some ways would make my outlook for the Europeans more balanced in terms of where the eventual Dollar decline will stall. USDCHF has a lot further to drop than the other two have to rally so it would actually suit my outlook.

The other currency pair that sparks some attention is EURJPY. Its pullback higher after the initial drop was rather deep and in terms of retracements has been supported by an interesting level at 112.47. I’m somewhat taken aback with this as firstly this could be just a correction of the rally from 106.82 and this has been relatively brief in terms of time. Secondly, if we had follow-through higher the target would appear to be around 125.00…

That takes some time to digest in terms of exactly what could drive it there but almost certainly a combination of both USDJPY and EURUSD. Well, the latter doesn’t seem quite ready to take the lead role. This means that, if this outlook is correct, then USDJPY is going to see a solid rally… It’s one to watch out for but best have this confirmed.

Otherwise I think today could be similar to yesterday with gentle Dollar losses against the Europeans…

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, March 14, 2011

The entire correction may well have ended…

I would like to preface today’s comments by informing that since I live in Tokyo we do have a high level of uncertainty. Tokyo itself has seen little damage but the current threat is power cuts which may disrupt this service since the timing of future cuts is not known. I shall attempt to work around these to achieve the minimum disruption. I appreciate your understanding if the normal timing for the release of these reports becomes erratic – though will always be daily.

Well, the massive shaker has made its impact and has sent USDJPY tumbling. There is more to come it seems. However, the daily structure has now taken on a rather uncertain structure so I’d like to remain a little cautious until there are supporting structures developing.

Equally we have seen a much firmer than expected reversal lower in the Dollar against the Europeans. Here too, I have mixed feelings. There is potential for an intermediate consolidation but very doubtfully any significant new low below Friday’s 1.3750 low EURUSD. Confusion is added by both USDCHF and GBPUSD. The reactions in these two have been somewhat milder but also add to the confusion with USDCHF potentially on the verge of stronger losses while I find the strength in GBPUSD rather difficult to fit into a bullish structure.

I would prefer to start the week with a degree of caution to make sure of what we are seeing right now – whether this is part of a sideways consolidation or the resumption of Dollar losses which has always been the ultimate expectation. If this latter scenario proves correct then there is still someway to go but not in an aggressive and sustainable daily trend. That I think comes later after a bigger correction.

There does seem to be a tendency towards rather nervous and whippy reactions right now so do take care.

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, March 11, 2011

Another correction due in the Dollar…

Mostly everything went basically to expectation yesterday, some targets meet quite accurately but one or two taking a slightly different route, although in the right direction. Overall the Dollar correction higher is developing in a manner I would expect and this remains the underlying direction and should last into next week – if it gets more complex then it may take until late next week. So just keep in mind that for the moment the better trades are those looking for the Dollar upside.

Yesterday’s push higher is close to initial target areas and should provoke a correction over the course of today to bring us about half way through the entire corrective process. Given we have a weekend there is even risk that this correction could develop in a more complex and choppy manner. Therefore the potential for flat corrections, triangles and even a correction that could generate a marginal new Dollar high and a recycling are also structures to watch out for.

I feel the Europeans are still fairly straight forward except for USDCHF that appears to have taken a sideways consolidation route already. That consolidation should be set to continue while EURUSD and GBPUSD find supports for a correction higher.

I do feel USDJPY is worth a special mention here along with EURJPY… The cross slipped to 5 points below the support I have been outlining. On the face of things this should recover. It will help that EURUSD should retrace higher so what is also needed is for USDJPY to extend higher a lot more efficiently than it did yesterday… It’s performance was slightly disappointing and should be of growing concern as to whether the cross can really extend as high as I’ve been saying. Never-the-less, while yesterday’s low holds the risk can still be for a move above 115.98 but this needs to develop quickly by the look of things else we could begin to see a stronger decline…

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

Have a great weekend
Ian Copsey

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Thursday, March 10, 2011

The Dollar appears to be setting itself up for further gains

With some slight variations and one rather larger one the Dollar managed to correct lower but found a string of support levels across most of the currency pairs which appears to suggest the it can make further gains today and into tomorrow. There are a couple of issues to look out for, and ones that have potential to break this larger correction, but overall I can’t see that we’ve seen a complete correction within the larger bearish structure. We may find it useful to be aware of the key supports though frankly if these are revisited it would see a little surprising. Breach of these would have a more dramatic impact.

Overall, however, the Dollar should be making further gains today with the only other potential snag being the risk of a more complicated sideways correction within the underlying correction. This latter issue is something that has been on my mind from the start given the time frame that appears to be required for this to qualify as a correction. Needless today, corrections being the most complex of all price movement it will be best to be aware of such potential.

Therefore there is little more I can say except be aware that we should still be expecting the Dollar to make corrective gains and note key levels to break…

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, March 9, 2011

The correction is set to continue…

I was quite content with yesterday’s moves, in particular with the losses in EURUSD although the earlier pullback was slightly more stunted than I had expected. Overall, however, the Dollar does appear to be showing its strength and actually all 4 majors were correlated in this. I still think there’s more to come though perhaps with a little less correlation but basically with the need for the Dollar to remain overall buoyant for now. Do remember though, this should just be a correction.

It looks like EURUSD will be the purveyor of greater volatility and it’s this which could provide some confusion over the day. This pair looks as if it could generate an early marginal new low and then retrace back to a little higher. If there is anything different to all this then it will be that the correction higher will develop more directly.

Indeed, this second option should not be ignored as it does appear to be the pattern for the other 3 majors. These appear to have hit their initial targets and are currently going through their own corrections already. Given that EURUSD did reach its minimum target it is quite possible that I am looking for a little too much from it – so keep flexible on this.

USDJPY also extended gains and these look set to continue after a brief pullback. The larger consolidation I have highlighted does seem to be on track. Of course, this generates an impact on EURJPY and this does look critical. The cross has been hovering above the retracement support I have been highlighting and may even reach that. The implication for this support is crucial, a higher target being generated. Here there is a question mark being raised since this higher target is going to require both EURUSD and USDJPY to be strong. If both pairs manage to find their highs at the same time then the higher target is possible. However, we should keep in mind that the minimum upside targets were met with the 115.98 high – right now, all we’re fussing about is whether this can make a higher high before it reverses. Momentum suggests it can but be aware of the risks…

AUDUSD remains bearish. USDCAD is finding the bullish correction very hard to maintain. It does seem as if today it must generate gains else slide down to its eventual targets…

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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Tuesday, March 8, 2011

Nope… yesterday provided the Euro top…

It wasn’t quite the start to the week I had envisioned but in the larger picture yesterday’s new high in EURUSD was close to a deeper projection target and the basic assumption that we should be seeing a brief period of Dollar corrective strength remains valid. This should last for the rest of the week and probably into next which does seem to imply some rather unpleasant choppy price action that will keep us on our toes. Therefore the general advice will be to take profits when they arrive in your lap and ensure solid trade set ups are seen…

Elsewhere USDCHF really spent a day doing very little. This one for me has more potential to be the dark horse which could surprise. This has a lot further to go on the downside, much more than EURUSD so that timing issues in terms of final Dollar lows (assuming there is correlation…) is going to be an interesting issue. I still have a mild preference for a deeper correction higher now but frankly it has done the bare minimum so there’s no structural reason why it cannot just extend losses now. Therefore be aware of both sides for now.

GBPUSD attempted to retest the 1.6343 high, failed and as a result collapsed. This pair is still in a dark place of confusion and probably my least favorite pair right now. However, after yesterday’s move the downside risk is now much stronger…

Then on to USDJPY; Once again this didn’t quite develop as I expected. Never-the-less it remains above the 81.56 low and I still fancy this higher for now. The larger picture is all a bit hazy also given the general expectation for the Dollar to rustle up some corrective strength sometime in April. Thus my focus is on the near-term which needs a stronger structure to dominate.

One of the factors included in USDJPY is going to be EURJPY which dipped further yesterday. The cross has done the minimum required to achieve the normal area of projection targets from the 106.82 low so has every right to reverse lower. However, structurally I’m not convinced that the rally is yet complete. With a generally softer EURUSD (barring deeper corrections) this does seem to imply a stronger USDJPY.

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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Monday, March 7, 2011

It looks to me that the Euro has made an intermediate top…

Friday provided mixed results again. The high in EURUSD was perfect. However, with the exception of USDCHF which chose to resume correlation with EURUSD the rest of the market didn’t seem too impressed with the Dollar weakness to return rather lackluster movements. So what does all this imply?

Firstly, I’ll take a step back and review from a larger perspective. I feel the immediate high is probably in place for EURUSD now and should generate a modestly deep correction considering the final targets. It should extend losses today but expect a fairly deep correction thereafter. Overall I’d expect the correction to last at least one week and could be slightly longer.

Given that GBPUSD barely managed to raise any enthusiasm for the upside this does look rather at risk. Even if it pops up and surprises I don’t really expect that much from it with a similar fate awaiting it. This then raises questions about the entire rally from 1.4231 and extreme doubts that we’ll see much higher when EURUSD manages its final rally.

USDCHF… a tough one… but I still see potential for a deeper pullback higher but really has done the minimum required. I am more bearish here so therefore aware of the larger downside risk. Take care with this one as it does have the capacity to surprise on the downside…

USDJPY has now retraced too far to retain a direct bearish structure. Indeed, it may even have capacity to generate a deeper move higher but for the time being I’ll watch what happens from here and sense it will probably remain in a range. This could rub off on EURJPY, itself due a correction, but once complete does look like triggering a stronger extension higher.

So, out of the 4 majors there appears to be a rather independence about each that is going to make for interesting developments over the week. Let’s see how it starts…

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, March 4, 2011

Correlation amongst the majors has broken down…

It was a funny old day really. It remained pretty quiet until quite late when USDJPY, USDCHF and EURUSD all rallied. GBPUSD seemed to have fallen asleep during the process to wake up and find itself having been left behind, blinked and went back to sleep.

Being an overall Dollar bear I have to come to terms with all this since there is some collateral damage that needs to be recognized. Predominantly this comes from EURJPY which obviously found itself being carried on the USDJPY and EURUSD tidal wave and close to the next major resistance area. The implication is still therefore bullish. Hourly & 4-hour momentum tends to confirm this, though wouldn’t rule out a correction, while daily momentum has a little way to catch up though could eventually develop a bearish divergence.

Now, the rub is this: EURUSD has almost reached its initial target. I still think there’s another leg higher back towards last November’s high but before it can get there a pullback is required to maintain the structure. If that’s the case then USDJPY has to be strong. Already it has exceeded my pullback target, not by too much but enough to raise the awareness that some other structure may be developing. I can work with this.

Next we have to think about USDCHF and GBPUSD… Well, USDCHF appears to be making the pullback I had expected from 0.9227. It doesn’t quite have the same room on the upside as EURUSD has on the downside correction but the lack of correlation may allow for this. I’m therefore comfortable with this but feel there may be need for care. GBPUSD… hmmm… this one is still quite complex, not one to really play with right now and one I’d prefer to watch carefully.

Finally, AUDUSD still appears to be on a rather fragile track back to the 1.0256 high so tends to harmonize with EURUSD. USDCAD may well have cut short its pullback. However, even if this suddenly recycles higher to meet my target the end result is that the next decline should be final (for now at least) and a larger correction is due. Therefore it tends to correlate with EURUSD…

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, March 3, 2011

The ratcheting Dollar losses look set to continue

The Dollar pullback yesterday was relatively brief and by the second half of the day it resumed the downtrend, this time correlated across the four majors. This decline still has further to go and I’ll be looking for extension later today. Having said that the move has become rather more of a ratcheting move and this certainly looks like continuing for some while to come and into next week.

I mentioned yesterday that we should be coming to a point where a deeper correction should be seen. I’ll cross that bridge when we come to it but the interesting part of this entire move is how these corrections develop as we are in slightly different sections of the wave structure through the currency pairs. Given this complexity I feel there is a strong risk of one or two pairs seeing some rather complex corrective patterns that will cause confusion over the coming 2-3 weeks…

Indeed, the ratcheting decline looks set to continue today but the immediate targets are not that far away. If you are maintaining longer term positions be prepared to be patient. If I see any of the currency pairs displaying a more direct path then it may well be USDCHF – but not quite yet. I think we need to get to the bottom of the next dip, see the correction and then I feel there’s a chance it could catch up slightly with the Euro.

The general outlook is echoed in AUDUSD and USDCAD. In particular the Aussie seems to have quite a tough barrier at 1.0250-80 and which may cause a sharper than expected correction lower in a recycling… watch for that possibility over the coming few days as we approach the target resistance. USDCAD is the same…

Finally, EURJPY maintains it’s obfuscation with the deep pullback higher. It could just fit into a bullish extension but at this point I feel the moves in the majors is still more correlated which tends to argue for range trading. I feel until there is some stronger break of the broad 112.00-114.00 range we’ll have to play a cautious waiting game…

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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Wednesday, March 2, 2011

Just a bit more Dollar strength before it resumes its losses…

Yesterday saw a little of what I was expecting but also a mild misjudgment in others. In particular EURUSD rallied but failed to move to new highs and basically appears to be recycling the prior move. It should still lead to minor losses early today but I still see the end result as a rally to new highs. While the current correction continues it would be useful for USDJPY and USDCHF to deepen their corrections also. Their relative performance in terms of reaching preferred retracement targets was slightly disappointing…

What has surprised is GBPUSD, moving to a new high but then failing to sustain those gains. It has confused the larger wave structure and forced me to review the daily charts. However, I can’t see any significant topping signal from momentum and probably quite the opposite so it seems more appropriate to watch for support levels to see the upside resume. However, it does look as if it needs to do this quickly else see a more complex corrective pattern emerge.

Indeed, this appears to be the case in AUDUSD and USDCAD… both are still displaying a more Dollar bearish outlook with just the immediate issue of where the correction stalls. Here, as elsewhere, the implication appears more towards a final extension in Dollar losses over the coming 1-2 weeks but which should be followed by a more robust correction higher in the Dollar. There are a few mild variations of the same outlook in the majors but the common theme does appear that the recent Dollar losses will probably not extend too aggressively at this point.

That leaves EURJPY which failed to push home with the gains I had been looking for but instead dipped firmly lower. The past weeks have been a bit of a cat and mouse type game, neither bulls nor bears able to press home their advantage. It does seem to be coming down to either as short term consolidation before higher or just plain, direct losses…

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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Tuesday, March 1, 2011

Overall the Dollar is due a mild correction before losses resume…

I think today could be quite interesting. I guess that depends on what is considered “interesting” but for me the picture that emerged yesterday both confirmed the Dollar weakness but at the same time the moves were not uniformly so. Both GBPUSD and EURUSD displayed strength while USDCHF and USDJPY languished somewhat, unable to take advantage of the Dollar weakness seen elsewhere…

It does seem to point to a correction in the Dollar. The issue here is whether the moves will be uniform or not through the 4 majors. I reckon they’ll not… EURUSD does still seem to have potential for push above yesterday’s high but I don’t think it’ll last for long. However, it should be the only pair that sees the Dollar weak. GBPUSD has returned like a magnet to the 1.6277 area. Will it break or not? Yes… and no… More accurately perhaps is “not yet…” However, when it does the implication I see is really quite bullish…

As for USDJPY and USDCHF, yesterday’s lack of commitment to the downside is beginning to suggest a deeper pullback. The ideal across the majors is for EURUSD to push to marginal new highs followed by a correlated correction higher in the Dollar.

This should see EURJPY push higher initially also but not too strongly at this point. A correction will be then due but within what still appears to be a final push back towards the 115.67 high. I doubt we’ll see a breach of this high, or if it does then it’ll be brief. However, that should be tale for the rest of the week rather than today.

AUDUSD is still on the bullish track but laboring. For the moment I favor the upside but I don’t think it’s going to be a clean move. Likewise, USDCAD is likewise on a bearish path and reached the 0.9710 intermediate target I highlighted yesterday. Here also a pullback is required before it can extend losses…

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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