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

Have a great weekend.
Ian Copsey


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