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HARMONIC ELLIOTT WAVE

Friday, April 29, 2011

Time to be less directional…

Yesterday sorta went to plan but not with as much accuracy as I would like… I am quite certain that we have seen, or will soon see, a deeper correction higher in the Dollar. There were several tings that grated yesterday although it could just be that I always want perfection and that didn’t occur.

The high at 1.4881 EURUSD was close enough to 1.4884 to be considered a direct hit. What bugs me a little is that there was no hourly bearish divergence. Then again there’s no rule saying there need be… GBPUSD ended between two targets and equally had no hourly bearish divergence. AUDUSD also fell between two targets, did see an hourly bearish divergence but the decline hasn’t been inspiring.

However, if I remove the requirement for stalling points to be more exact but to be in the general vicinity, then the calls were pretty much satisfied. GBPUSD is also getting strained in terms of the final upside projections which already are being forced into the more excessive ratios so that if yesterday wasn’t the intermediate high I am looking for then those final stalling points are going to stretch the extensions even more.

On balance today I’d like to say that I feel the correction should continue. However, in reality I feel that while we are at these early stages it would be wise to be aware of the potential for the Dollar to dip one more time. I don’t like these ambiguous situations but then they’re not that uncommon so have to work around it. Overall I feel the continued drift higher for the Dollar is more appropriate to last into Monday at least before the final leg lower for the Dollar into the end of next week.

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

HARMONIC ELLIOTT WAVE FORECASTS NOW AVAILABLE FOR U.S. INDICES

Thursday, April 28, 2011

It took its time… but the losses have finally developed… just a bit more to go…

I found yesterday a bit of a strange day. Everything looked fine & dandy in early trading but, then everything developed in stages. EURUSD corrected slightly deeper than expected, and GBPUSD also… but then the timing of losses became rather erratic. GBPUSD shot higher in the European morning leaving EURUSD behind. Then it took until the very end of N.A. trading to see stronger losses develop. By this time USDCHF also decided to join in along with USDJPY, these two pairs having spent the day until then moving higher.

It looks like everything has come back into a more coordinated effort now. This should allow a period of correction to the losses just seen but I imagine by European trading we should see follow-through to what may well be the lows of the week.

I had mentioned on Monday that this entire Dollar decline could end by Monday. That seems too short now. The lows I expect to see today should provide a modestly deep correction that should last until Monday at least. This should leave the final legs lower in the daily decline which will probably take the rest of next week now.

A general word on EURJPY and USDJPY… These both saw strength and the cross in particular which has actually been in line with what should be a move to new highs. The 122.00-28 area may well hold today for a correction but next week see extension higher. For USDJPY the early ending of the decline at 81.26 has pushed the structure quite firmly into a corrective structure. I still expect further losses which could be quite deep still but overall I still see it as a correction.

A final word on AUDUSD. I hate calling tops in this one as it always seems to hit back. However, there are bearish divergences in just about every chart from monthly down… I wouldn’t be too socked if today saw the final high… Take this with care. It’s in line with what I see elsewhere in terms of a top today. We’ll have to see how deep it drops…

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

Good luck
Ian Copsey

HARMONIC ELLIOTT WAVE FORECASTS NOW AVAILABLE FOR U.S. INDICES

Wednesday, April 27, 2011

Further losses to come…

In the end the Dollar made the extra leg higher to meet the resistance levels I highlighted on Monday in GBPUSD, EURUSD and also point-perfectly in AUDUSD. That brings greater confidence in the structure I have been observing and this should lead to further Dollar losses over today. GBPUSD is a little behind the other two but I’m quite comfortable with this since it has a closer final target. It seems likely we shall hit the penultimate target later today – may just last into tomorrow but it will have to make hard labor to slow down.

So, this next Dollar low should cause a pullback, and probably a decent size one, lasting into Friday at least and possibly into early next. If it really slows down in the final leg then it will really highlight the fact that we are approaching a key Dollar low that should trigger a correction lasting around 2 months.

I’m also eying the U.S. indices which are on the brink of confirming their own rally to a very significant peak and the fact that there has been a broad correlation between the Dollar losses and the gains in equities makes the prospect of a joint turn quite palatable.

A word on USDJPY: I was quite satisfied with its movement yesterday and does, at last, appear to be making some sense. This has a little way to go on the downside – and I mean little over today but that too is due a pullback. The nature of the pullback could be crucial in identifying the nature of the decline – does it imply new lows or has this been just a correction? With the Dollar expected to be strong over the next 2 months I suspect the latter.

So… keep you eyes on the Dollar downtrend and watch for the target areas to be achieved, particularly in EURUSD, GBPUSD and AUDUSD which do seem to be working well within the structure I have…

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

Good luck
Ian Copsey

HARMONIC ELLIOTT WAVE FORECASTS NOW AVAILABLE FOR U.S. INDICES

Tuesday, April 26, 2011

Is it time for the Dollar losses to resume..?

It was a bit of this and a bit of that yesterday. There are quite good signs that GBPUSD and AUDUSD completed their corrections yesterday. EURUSD is still sitting in the middle of its range and USDCHF dipped to marginal new lows and is left in mid air right now.

First of all, I can’t see GBPUSD and AUDUSD rallying without the Europeans joining in. While I’m not totally comfortable with the limited pullback in USDCHF I’d not fight any new lows. Therefore, the weight of argument does appear to be in favor of Dollar losses resuming today. The (also) relatively shallow pullback in GBPUSD does concern slightly as it implies a stronger extension higher than I had originally anticipated but within bounds of normal ratios. This is basically in line with the general expectations for the Dollar across the board anyway so does not look out of place in a relative manner.

If there is any alternative then it’ll be down to a recycling in USDCHF higher and to allow EURUSD to achieve a deeper pullback. However, it does leave GBPUSD and AUDUSD a little vulnerable in that case…

Even the limited rally in USDJPY and the continued weak momentum appears to support the view for Dollar losses in general. As mentioned yesterday, I’m not 100% comfortable with this in terms of structure as it doesn’t appear consistent with the larger daily implications. Given the fact that I feel the Dollar should recover after this final leg lower it does seem to smack of consolidation overall in USDJPY…

Certainly, from the look of EURJPY which looks to still be within a sideways consolidation it does appear as if the moves in the individual pairs will be generally correlated to a strong extent…

Thus, watch for breaks to confirm my suspicions today…

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

Good luck
Ian Copsey

HARMONIC ELLIOTT WAVE FORECASTS NOW AVAILABLE FOR U.S. INDICES

Monday, April 25, 2011

Early risk is a slightly deeper correction/consolidation, later resumption of Dollar losses…

I was mostly satisfied with Thursday’s moves with the levels reached in EURUSD and USDCHF were pretty much spot on. GBPUSD was a bit stronger than I had expected but in the right direction overall. It didn’t take an analyst to see that Friday would see tight range trading…

So, with weekend over and dust and cobwebs still need to be shaken off, the early part of the day may well continue pretty subdued. From what I’ve seen already it looks like EURUSD should do very little until European trading and overall I feel that we should see a slightly deeper pullback after Thursday’s Dollar losses. However, don’t get too comfortable with the pullback. We are at a stage in the wave structure where the “rules” are fairly lax and the downtrend able to resume at any point. What is unclear is whether the rather frenetic losses will continue at the same pace or slow right down…

Thus, while I have a preference for a mildly deeper correction, do not fight the Dollar downtrend.

Elsewhere USDJPY slipped further which is beginning to concern. Well, perhaps it’s not as I do have a bearish view through to the end of the year as you probably know. Right at this point the key point is deciding whether the 85.51 high completed the correction or whether there’s a minor new high to go. In saying this I am very aware of my outlook which calls for a fairly solid Dollar correction higher once the current decline has ended. The correction could last into June or July. Therefore there is a certain conflict between USDJPY and the Europeans. Key will be how EURJPY reacts. At this point the cross needs to rally to maintain the bullish structure. If this begins to break down then we could have a rather soggy outlook for them both…

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

HARMONIC ELLIOTT WAVE FORECASTS NOW AVAILABLE FOR U.S. INDICES

Thursday, April 21, 2011

There should be mild follow-through today but we’re then due a correction…

Well, the Euro shot like a horse from the starting gates yesterday… The expected correction was so brief you’d hardly notice, but it was there – less than a 14.6% correction… The rest of the day maintained the rally and doesn’t appear to have quite completed the next intermediate leg. This it should be finished today but the expected high is then likely to hold for a while. Conveniently with the majority of the market on a holiday this slots in nicely.

The point to note here is that the move has developed so aggressively that it certainly looks as if EURUSD can reach the most aggressive of its upside targets above 1.50… It would seem this will imply gains through the remainder of next week at least.

What surprised was the relative laggard nature of GBPUSD which actually did perform close to expectations with the temporary top at 1.6380. However, this still has some way to go as well and potentially above the 1.6645-99 area I had been contemplating. Coupled with the decline in USDCHF that has quite some way to reach its own targets the prospect of the time frame may just stretch into around 2 weeks…

EURJPY was dragged higher by its EURUSD collar and looks quite healthy too. I suspect that we’re going to need USDJPY to play its part over the coming week or two also as it really failed to excite yesterday. However, where it stalled and the pullback do seem to be quite in line with structural development so while it doesn’t drop gains can develop directly. If the 82.17 low breaks then we’re due another leg lower before potential for a recovery…

So, for today I don’t think we should be expecting a repeat of yesterday but certainly some further Dollar losses but with less aggression…

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

Have a great long weekend
Ian Copsey

HARMONIC ELLIOTT WAVE FORECASTS NOW AVAILABLE FOR U.S. INDICES

Wednesday, April 20, 2011

The Dollar’s due a correction after yesterday, but the main direction remains bearish

It was a slow day yesterday but overall the recovery in EURUSD and GBPUSD were pretty much in line with expectations. Interestingly even USDCHF maintained an upward bias also but I can’t see this lasting for long.

Thus, having seen the first recovery it should now be time for a correction. The problem with this stage of the structure is that the correction could be really shallow or it could be very deep… It’s one of those positions where there is no way of knowing in advance the depth. However, should set things up for a much stronger follow-through on the next rally and that is the base message. Don’t get caught up to much looking for losses but spend more time identifying the low.

Once the next leg of the Dollar’s decline begins I suspect it should increase in velocity to easily break through its lows and on towards the eventual targets where I feel we shall see the end of the entire move from the 1.3885 low (EURUSD) and 1.4231 low (GBPUSD.) From there we can expect a pullback for 1-2 months at least.

USDJPY didn’t get very far. However, EURJPY rallied quite solidly and has raised the risk that we’ve seen the low here also. Given the expectation that EURUSD will accelerate higher this shouldn’t come as a surprise – nor should the expectation for a correction lower in the cross. The slightly less obvious one is USDJPY but overall I still see this as positive also which could imply a pretty persistent rally in the cross.

Thus, today’s a day to take it easy for the first half of the day and attempt to spot the pullback lows… I’ll try and highlight the most likely areas but solid trade set ups are a must…

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

Good luck
Ian Copsey

HARMONIC ELLIOTT WAVE FORECASTS NOW AVAILABLE FOR U.S. INDICES

Tuesday, April 19, 2011

Now we should be able to look for Dollar losses…

Directionally yesterday was correct across the board. The extent of the losses in some cases was somewhat beyond expectations but within the overall boundaries for the structural position in which I think the Dollar is currently travelling. Have we seen the full extent of the Dollar pullback? In the majority of currency pairs I think so but there may well be a risk of mild follow-through in one or two.

Therefore, I think today should provide a good opportunity to look for Dollar selling opportunities for the coming week or 10 days – that is in all but USDJPY. Along with EURJPY we saw the declines reach the sort of areas which should provide support. Here I feel there is risk of another dip to marginal new lows but with momentum showing signs of tiredness, as long as the decline is not excessive we should begin to see these two stabilize also and begin to recover.

That tends to imply that any initial Dollar losses against the Europeans may well be limited at first and then we’ll have to see how deep the pullback can be. This does look like the key difficulty we’ll have to overcome today.

There’s not really too much more to be said for now. I still suspect today could prove difficult in terms of identify Dollar extremes given we are still in the very early stages of the coming decline.

The twice-weekly (Monday & Wednesday) report for the U.S. Indices (DOW, S&P 500 & NASDAQ) is just about ready and launched on my website with the first report due tomorrow. http://www.harmonic-ewave.com/Services.html.

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

Good luck
Ian Copsey

HARMONIC ELLIOTT WAVE FORECASTS NOW AVAILABLE FOR U.S. INDICES

Monday, April 18, 2011

The Dollar is poised to resume its losses… but probably not today…

Friday was close to expectations, mainly a Dollar positive day in general though not quite uniformly. Indeed, from the look of EURUSD and GBPUSD there does still seem to be a little more to go before the downside resumes. There are a couple of basic patterns within this outlook, the first being continued sideways consolidation and the second a deeper correction higher for the Dollar before it caps out. However, there doesn’t appear to be a uniform development that would satisfy all currency pairs.

For example, I can see definite potential for GBPUSD and EURUSD to remain in sideways consolidation. This would tend to suit USDCHF also, and potentially USDCAD. However, from what I can see, AUDUSD actually needs a deeper pullback, probably a recycling to its recent swing low. That would be acceptable in GBPUSD, EURUSD and even USDCAD… but USDCHF could find that a little tough to absorb. Well, it’s possible but it would need a minimum reaction.

So as we start the week an element of observation is going to be required to see which of the two scenarios develops. In terms of the overall larger structural implications either is acceptable but whichever occurs it should lead to eventual Dollar losses before too long.

USDJPY and EURJPY both failed on the upside and thus appear to implicate the downside. However, neither has stated its case particularly well. In regards to USDJPY I am basically reluctant to follow what appears to be the general outlook of further robust gains. However, I am struggling in my mind how to fit these both into my preferred bearish outlook into the end of the year in terms of the next 2-3 months.

After the Dollar has completed its decline against the Europeans over the coming 2 weeks or so I do expect a pullback – only a correction but one of indeterminate degree. It could be shallow or maybe moderately deep for the position it’s in. That could cloud the outlook for the JPY pairs. So for now I’ll take these step by step…

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

Have a profitable week
Ian Copsey

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Friday, April 15, 2011

I want to be Dollar bearish but I’m not sure today is the right day…

Yesterday was a strange day… The market appeared to want to sell Dollars but out of the Europeans only USDCHF saw new lows while EURUSD came close to retesting the high – twice – and GBPUSD moved higher but within range. I do see the Dollar as vulnerable – the new lows seen in USDCHF appear to be indicative of that but the haphazard, almost reckless swings in EURUSD and the range bound GBPUSD do add caution about expecting direct Dollar losses. I won’t rule it out as I do feel it will happen eventually, but in particular GBPUSD doesn’t seem quite ready and EURUSD appears to have ADHD… If it doesn’t happen today then it should by the end of Monday.

Actually, looking at EURJPY it does appear to have broken the downward move. That has been a bit of a surprise. I’ve also taken on a different perception of USDJPY. I had been following a trending structure in them both – and may still in EURJPY – but what’s happening in USDJPY is not really consistent with a trending move. By this, I can’t see that it’s going to sail off higher for too long and from that I have to gauge the reaction in the cross also. However, both saw hourly bullish divergences yesterday, and in USDJPY a 4-hour divergence also. The pressure does seem higher but I will take this a bit more cautiously…

As way of background, U.S. equities bounced nicely from support yesterday and do still seem to be headed higher along with gold. This tends to tie in with a weaker Dollar overall so at the moment I do see this as the main direction for a few weeks more.

For those interested I am planning a new service for U.S. equities soon, perhaps as soon as next week with two updates a week. This will be through www.harmonic-ewave.com. I plan weekly reports for European and Asian equities to follow in May together with gold and silver.

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, April 14, 2011

Yesterday’s range trading has altered the landscape a little…

The rather complicated description of the conflicts between the currency pairs seems rather unnecessary in retrospect today. Perhaps the conditions I saw were indicative of something brewing but the final outcome was not quite as expected. In particular I’m looking at USDJPY which ended up making no break at all, but remained in a sideways range with slightly declining peaks perhaps warning of a descending triangle. Now that does alter landscape somewhat as any break below 83.46 would risk a deeper follow-through than the areas I outlined yesterday. Indeed, if this does occur along with EURJPY then the outlook would be quite bearish for both. However, it is a consolidation so perhaps it’s best to stand firm until there is stronger confirmation.

EURUSD couldn’t manage to muster up the energy to make another foray on the upside. The decline from around the same peak does warn of an initial dip today but I still see this as bullish. Indeed, when I look at USDCHF really failing to make much headway at all yesterday a bearish Dollar does seem to be implied… This does suit the overall view for this year but will mean some adjustment to the expectations in USDCHF.

I’d prefer higher in GBPUSD also. The only problem is yesterday’s narrow range which could threaten a minor ne corrective low before it can launch itself higher. However, considering the apparent need for the Dollar to make initial gains against all the Europeans this outcome does seem possible. Thus, don’t get too carried away with Dollar strength if it is seen in the early stages today.

This, Asia and possibly early Europe could see some fairly subdued trading, mild Dollar firmness, but as long as this doesn’t develop too far I still feel the final outcome will be a lower Dollar by the second half of the day.

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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Wednesday, April 13, 2011

There are some interesting currency pair conjunctions that need to be resolved soon…

This is going to be hard to explain for those who don’t have knowledge of Harmonic Elliott Wave and price structure, but I’ll do my best…

First, USDJPY and EURJPY bounced nicely from around the right support levels – just a few points awry. Now these support levels, if the count is correct, imply rallies to new highs. We have seen that already occur in EURUSD so this definitely has a bullish bias. USDJPY actually had a range and this does look like making a minor new low early today. Thus over the day, barring any break down of these supports the implication is bullish in both.

Now, I suggested yesterday that EURJPY may have seen its high. Indeed, the losses were quite impressive. However, one thing about the end of a directional move is that price will retrace to the area around the last correction and pullback. EURUSD dropped right through which opens the risk that what I thought was one wave may have been another. (That’s as plain as I can make it for non-Elliotticians…) Thus, we have this stand-off between bullish expectations in EURUSD and (later) USDJPY which tends to imply new highs.

I’ll add into the fray AUDUSD. This hasn’t even managed to get to the last key correction… It needs to extend losses quickly to satisfy this exceptionally common reaction else this will also rally. Thus tending towards an implied weak U.S. Dollar.

However, USDCHF is in a world of its own and looks to me as if it needs a fairly solid correction. Well, I’ll not get too bothered about that as it tends to go walkabouts on its own anyway… GBPUSD on the other hand is in its own personal world… I’m struggling with ratios here which are not really consistent with what I normally see and this tends to weaken confidence. However, my impression is more bullish but in what may well turn out to be a sideways consolidation.

To sum all that up… We need USDJPY to make only marginal new lows today and rally along with EURUSD to push the cross higher. If the Aussie joins in on a stronger recovery then the general impression is Dollar bearish today…

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, April 12, 2011

EURJPY appears to have topped – the Europeans still indecisive…

It was hardly a frenetic start to the week but perhaps EURJPY has found itself a top for now… Starting with this cross it does look like it has begun a deeper pullback that should keep it on the defensive for most – if not all – of the rest of this week. I can’t say the same precisely on USDJPY. I certainly don’t think it has completed its correction yet so I can’t really see a repeat of the one-way rally at this point…

Right… the Europeans. They weren’t too exciting yesterday were they? First, I don’t think EURUSD is done on the upside just yet and I don’t think there’s too much room on the downside for the correction from yesterday’s early high. This should spurn a further rally that should get to the top half of the 1.45’s at least. Beyond that I’d rather look hard at momentum to see what it’s like at that time.

The question is whether this will help the Dollar weaken against the other two Europeans. USDCHF – yes, I can see that. GBPUSD… well, I’m not quite so confident but if this is to go higher we probably need an outside day with an early break of yesterday’s low and follow-through higher to provide a temporary high. However, I can see the Dollar losses getting carried away at this point either so the basic theme appears to be break-reverse-break-reverse… (no jokes about women driving please…)

If the Aussie can be used as a proxy for the Europeans – which is not always the case – I see a similar fate for it today also. The pullback from yesterday’s high is not far from the target retracement and should provoke another new high. However, that then should mean we get a deeper pullback.

If I have any broad message, then that’s it. We are due deeper corrections – but first the risk of new Dollar lows… Take care not to get whipped at either extreme.

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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Monday, April 11, 2011

This still isn’t quite going to plan… some adjustment is needed…

Well, my day wasn’t made… The Dollar keeps throwing curved balls that have complicated the entire structure but with weekly momentum very high and daily momentum displaying a pretty steep bearish divergence in EURUSD we should be approaching some sort of peak. Of course we still have to see whether that final high comes directly or after a pullback and that’s the current problem to tackle.

If I take any direction then it is from GBPUSD. I feel that this pair is finally emerging from behind closed doors to steal another base but I see this requiring a pullback before it can extend significantly higher. It does seem to need a new high today in the current rally but would then require a few days in a pullback before it can progress. It would be easy to call for a retest of the 1.7041 high but I doubt it’ll get anywhere close, but closer than we are now.

This sort of pattern when applied to EURUSD could well see a push into the low-mid 1.45’s followed by a similar correction and then a final rally towards the 1.5143 high but again, I don’t see it quite reaching that far and not for a further 2-3 weeks.

So what about USDJPY and the crosses? Very clearly USDJPY has suffered a few days with lack of energy while EURJPY is still pressing higher. First, on the cross, I do feel we’re approaching a key high. The only thing that concerns me here is that 4-hour momentum is pretty much in neutral territory. Certainly there is a bearish divergence but a mid-level reading in momentum normally allows another push higher. Let’s just say for now it’s bullish but I do see key projection resistance not far above current levels and we’ll see the reaction and keep in mind the EURUSD outlook. On USDJPY I still feel it needs another push higher but we are closer to key daily resistance levels at which, at the very least, we’ll need to take care…

With Forex being a bit on the complicated side I’ll just add a note for those following the S&P 500… the current contract has topped out as expected but should bounce from around 1,300-10 to reach 1,360-80 over this week – maybe into next…

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, April 8, 2011

I am sensing we’re seeing a Dollar low… maybe one more leg to go…

I’ve not really enjoyed this week. Even the earthquake last night woke me up so what with the frustration in the market and lack of sleep I’m Mr. Grumpy this morning… So let’s have a go ending the week with a bang…

I think today has potential to be a significant day. The S&P 500 needs a pullback – not too far as it’s still in a move higher. I look at the currencies and see potential across the board for a change in direction. Short term divergences are beginning to develop in a more constructive manner and close to levels which I feel are important. I can’t say I like this week’s structural development but the larger wave structure does appear to be indicating turn areas. In the larger picture I feel this will be a correction only but a deep enough one to sit up and take note…

Even the normal ebullient gold has hardly displayed the persistent strength as seen over the past year. Actually I do feel there is just a bit more left in the upside in this but in the large picture there are a few warning bells to suggest a more substantial correction…

So… for today… I think we’ll see EURUSD and GBPUSD move higher but I don’t think these will get too much higher. If anything GBPUSD may have the stronger potential. USDCHF… well, its ability to remain in tight ranges these days doesn’t really suggest much movement at all. Even the Aussie seems to be finally coming to a level that should generate a larger correction. I still fancy a little higher still and perhaps this may drag on for another day or two, but the signs are growing there that a pullback is due. The same with USDCAD. By the time Europe come in 4-hour momentum will be providing potential for a bullish divergence. This is a tighter call but let’s just say the longer this moves sideways the greater the support for a bounce…

And finally USDJPY & EURJPY… Yes, here too I feel we have come far enough – well, maybe a little more but these are displaying signs of exhaustion too…

Come on… make my day…

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

Have a great weekend.
Ian Copsey

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Thursday, April 7, 2011

Sometimes it seems like the mouse is chasing the cat…

Yesterday was a bit good and a bit bad. The main “bad” was EURUSD… Boy, that has run me ragged this week. Just as I felt the 1.4347-60 area didn’t seem possible it goes and gets there… That has been a weird and wonderful rally from 1.4020… OK, so now it has achieved that target (and allow for a small extension) the risk has to be lower. Bearish divergences are more uniform now also so the pressure for a correction is growing.

USDCHF went right. The early stages yesterday were always going to be a bit touch & go but the drop to 0.9130 was perfect. That should now be set to rally. However, GBPUSD is a slightly mixed bag and one to watch. I don’t think we’ve seen the high here and there is a much stronger risk of a push above 1.6400 before it corrects lower… Watch out for that one.

USDJPY … hmmm… as the day starts it’s pressing that 85.51 high. If I have any preference then it is for the correction lower to develop. What concerns me here though is the lack of 4-hour bearish divergence and indeed even 8-hour bearish divergence… With EURJPY still not having completed its rally and EURUSD not expected to extend that much higher the mode of extension does appear to be through USDJPY… Anyway, let’s face it, right now trying to pick the high is a bit like sticking a pin on a millimeter square while blindfolded… Let’s just say there does seem more to go on the upside but I do sense a deeper pullback not a million minutes from here…

So basically, I do see today as seeing some sort of reaction across the board. There is risk of some early volatility but even in U.S. stocks I see potential for a pullback lower at this point – the S&P 500 finding resistance around these levels and pulling back to 1,300 before rising. Therefore I feel something’s going to surprise today…

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, April 6, 2011

Slow motion indeed… except for the JPY pairs…

Dull, dull, dull… but does seem to limit the Dollar downside for the moment. Don’t get me wrong, it can still edge lower over today and maybe tomorrow but it’s tough to see the Dollar extending losses against the Europeans too far at this point. If there is any exception then it’s probably GBPUSD which actually did perform a lot more strongly and does still look quite perky. From the three Europeans it probably remains the one that can outperform.

As for the other two I think we’re going to see a rough replication of yesterday’s indecision. As I mentioned, I suspect that will eventually mean a weaker Dollar but I wouldn’t be at all surprised if the first move is a higher Dollar before the reversal back lower into late today or tomorrow. That would probably suit GBPUSD also, but in its own way. Probably it’ll be best to stay clear of EURUSD and USDCHF and concentrate on GBP – best buying on dips.

Now… USDJPY and EURJPY… just won’t lie down and die… I’ve held a long term (through to the turn of the year) bearish stance and while I can absorb this rally into such a structure the nature of the strength in both has a certain duality which does concern… EURJPY does appear to hold a potential medium term bullish structure and one that threatens the USDJPY bearish cycles. Could it have found its long term low already? To be honest, just from the cycle perspective we are now 9-12 months from that (ideal) multi-year cycle low and given the variance around cycle lows, well, it is possible. I just can’t reconcile the structure.

However, the rally has been just a bit too direct to feel comfortable as it is generating the need for some excessive (but not necessarily) projection ratios which don’t often occur. The alternative is that USDJPY could just be seeing a running correction higher but right now the momentum picture is still stretching any bearish divergences that develop and each time they break we see acceleration higher. Clearly it’s still in a trend and at this point we can only observe when this trend breaks down but during this try and identify the higher risk areas for termination. It’s a bit of a cat & mouse game that carries risk of trying to anticipate a top too early so be cautious at all times…

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, April 5, 2011

It looks as if we could see slow motion this week…

Yesterday’s moves weren’t exactly as I had expected but not too different either. The limited upside in EURUSD before the pullback was rather a disappointment but not drastically different to the ideal. The same could be said of GBPUSD. However, with both rallies mildly limited it does tend to point to a lower upside target which could be reached by tomorrow or Thursday at the very latest. This is the one I would anticipate causing a much deeper correction that could last a long time.

If that is the case, then we’ll need to watch ourselves in GBPUSD. The adjusted outlook was for a new high above 1.6400. However, if we take both EURUSD and GBPUSD as being correlated (not necessarily a foregone conclusion) then a deeper correction in EURUSD could mean that we are currently only looking at a pullback in GBPUSD. However, for the moment I remain cautiously bullish and will look at the structure of this rally to judge whether it’s corrective or otherwise…

USDCHF has drifted lower and should make another attempt lower later today. However, at this point it does look more like a correction. It does seem as if the 1.1819 low was a final stalling point for this decline. I will expect it to move lower later this year but for now the implication does seem bullish overall – in a correction higher.

USDJPY and EURJPY declined as expected and this should continue. There’s still some way to go for this.

AUDUSD looks like forming a high soon as well. I don’t think yesterday provided the final high of this part of the rally but should do so over today or tomorrow. USDCAD edged lower and bounced. However, this recovery doesn’t seem to be constructive and from the look of momentum we do still seem to need one more low to develop before the correction recycles…

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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Monday, April 4, 2011

Slight adjustments required…

Last week started badly for me and, while less so, ended slightly disappointingly also. In particular the NFP played its part by generating a pretty big whipsaw which caused EURUSD to divert from its expected path, drove GBPUSD to its anticipated pullback target and appears to have knocked USDCHF totally off course…

Having seen that on Friday evening I admit to not really looking forward to having to unravel the knotted twines but I do see constructive developments in EURUSD and GBPUSD. The Swissie… well, that’s going to need a while longer to solve. From what I can see Friday’s shenanigans have probably indicated a slightly lower target for this current move higher but still remains in a daily uptrend. This seems to apply for GBPUSD also and probably the outlook for these European buddies appears quite well correlated now. However, it does look more like and up-a-bit… down-a-bit type move for this week.

USDCHF… Now that it’s broken the 0.9274-0.9318 area we’re going to have to take more care.

Perhaps the best success came in USDJPY which reached the upper end of the 84.50-74 target range and stalled. The market is clearly beginning to eye carry trades but I suspect this week will be seeing some unravel a little bit. This was a perfect test but equally, while Friday’s high remains intact the bearish divergences may well have an opportunity to see a pullback lower. The short term is a little less clear as EURJPY actually surpassed the target I thought had a chance of holding. The next projection is still a bit higher so it suggests some short term upside risk for USDJPY to allow the higher target in the cross to develop.

Similarly the Aussie has extended further higher and looks as if it should reach just a bit higher but the bearish divergences are looming more like dark clouds to limit the current upside for a deeper correction – but probably not the end of the daily rally. USDCAD is fluffing around in the sort of support area I’ve been indicating but momentum does suggest there is still downside risk but perhaps mostly done now.

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

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Friday, April 1, 2011

My concerns over the Dollar appear to be confirmed…

Well, yesterday said it all. Both EURUSD and GBPUSD rallied more strongly than I can accept and lump on top of that the continued losses in USDCHF and it’s hard to be Dollar bullish any more – except against the Yen maybe.

The last hurdle to overcome for EURUSD is obviously the 1.4247 high but as long as we don’t see too much more on the downside after yesterday’s rally we should see those gains and up to the 1.4281 high, possibly a small overshoot. If we see this confirmed I shall become a little more confident on the final outcome which, at this early stage, seems to be above 1.44 initially and may even eventually get back towards the 1.5143 high over time. Still, it is early days and there’s some work to do to provide a stronger structure.

This should keep USDCHF firmly on the downside after the early pullback today. GBPUSD rallied above key resistance so for now the implication is higher but still with the early risk being a deeper pullback from yesterday’s high.

Next… USDJPY & its cross… It’s rally following the break higher has certainly been pretty persistent. However, we are beginning to see a 4-hour bearish divergence potentially form. It would still allow some upside and both this and EURJPY do still seem to need an extension higher. I would not be surprised to see the 84.50 high retested and in EURJPY to at least 119.23-50… The only problem I have with these two is the structure of the rally and whether this is corrective or a stronger trending move. Therefore I do have some concerns but at this point it’s hard to baulk at the trend…

Interestingly AUDUSD seems to need a bigger pullback lower just as the Dollar appears to have become weaker elsewhere…

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

Have a great weekend.
Ian Copsey

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