Monday, May 2, 2011

I’m still looking for the Dollar to correct higher…

Friday did see a rather non-directional day though it was more in the opposite “non-direction” than I had anticipated. In the end it didn’t break to new lows against EUR & GBP but was weak against JPY, AUD & CAD … more significantly so against CHF.

So what next? Well, my preference is still for the Dollar to correct higher… I cannot 100% rule out marginal new lows in the Europeans but with the exception of USDCHF I feel the other two will probably remain below their respective highs. While I’m making an exception for USDCHF I don’t think we’re going to see massive losses from here. It does seem to need a new low but then a correction that should then fall into line with the other Europeans. I suspect we should see another day or two of corrective Dollar gains at least before it turns lower for what may be the final decline for around 2 months.

Even USDJPY defied my preference to dip to new lows. This is on a downward path but I still count it as corrective. Where I do see more potential conflict is in EURJPY. Yes, this should edge lower also but in the structure I am considering I feel that the decline is more corrective at this stage and my preference is for it to return to test last week’s high and above. This places a small question mark over USDJPY and EURUSD in terms of both expecting losses. It either means we’re going to see more complex range trading … or… I’m wrong about EURJPY also. This is certainly something to observe since it could generate a decent clue as to what’s happening.

Out of interest, U.S. indices are due to make a pullback over the next few days also – though I prefer to see one more new high first…

Today’s free analysis is for AUDUSD and can be found on

Have a profitable week
Ian Copsey


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