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

Good luck.
Ian Copsey


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