Monday, June 20, 2011

The strongest indication still appears to be for Dollar gains…

I left you with the expectation that we weren’t far off a Dollar low. In fact we had already seen the low and therefore the majority of last week generated gains. Having just gotten back in the seat again I need to get a greater sense of structure so will be rather conservative today to get a better sense of the energies around.

If I merely take the judgment that the rally in EURUSD developed in a corrective manner then it does imply a new low. From that perspective I feel the high seen on Friday probably provides the deepest we should see and thus the downside should develop directly. Now, if I have got this correct it should imply that we should see two more pushes lower to reach the target for this move. Equally this should apply in GBPUSD and in a different way in USDHF. However, I do have a slight conflict as the correction higher in the Swissie still seems to imply what should still be comparatively stronger gains compared to the other Europeans. Just keep that one in mind.

The pullback in USDJPY was limited with losses having made it down to the 79.56-69 lows… There is room for a correction on the upside. However, if I look at the bigger picture there appears to be a disconnection between the much larger downside risk and the limited movement seen until now. This gives me a slight sense of unease. Therefore I’m very mixed on this one. The EURJPY cross may well help us out on this as the daily structure is shaping up for a larger fall. This needs to get its skates on otherwise there’s a chance we could just go right back into range. Therefore, keep your eyes open on what this cross does as I feel it will be the clue for USDJPY…

USDCAD is looking more bearish. AUDUSD… I’m mixed there and would like more development to get a better feel…

Have a great week
Ian Copsey


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