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 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

Have a great weekend
Ian Copsey


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