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HARMONIC ELLIOTT WAVE

Friday, July 29, 2011

Still not quite what was expected but still broadly in line with the larger picture

I had been looking for a quicker resumption of Dollar losses… but fell asleep waiting for them… The reasons I had thought we would see a quick correction was actually GBPUSD. Here I couldn’t see much downside at all – support at 1.6297… It was interesting to note that this support broke by only 3 points while it took the Euro the best part of the day to correct very close to the full extent of the retracement support area I indicated. Now both those levels hold the implication remains higher for both of them…

That left USDCHF treading water for the rest of the day but remaining below my 0.8046 resistance, a nice flat correction while USDJPY continued to perform in its own drugged state, staggering this way and that but without any conviction either. I do feel that once the Dollar continues its losses these two pairs will extend losses also.

Once EURUSD, GBPUSD and USDJPY hit their Dollar lows we should then see a stronger reaction. I suspect USDCHF will also but in all but the Euro I see the Dollar strength being temporary. However, that needs to be addressed at the time and there’s still a day or two to go before we even reach the Dollar lows.

That leaves AUDUSD. I had wanted resumption of gains but instead it chose a deeper correction. It’s still above critical support so I’ll remain bullish here too. USDCAD was move volatile than expected there's reason to be more cautious here as the structures have become rather ambiguous...

Have a great weekend
Ian Copsey

Thursday, July 28, 2011

Not quite what was expected but still broadly in line with the larger picture

It seems the Dollar losses suddenly faced a much closer block than expected… In some ways I’m quite content with this as the stronger projections were a bit more than I had originally expected while yesterday’s highs are more appropriate to the final targets I have envisioned. I’m also happier with this on a time basis as I’d like this Dollar decline to come to a conclusion for the reversal.

So while yesterday was not as planned the outcome remains the same although there’s little wriggle room left on the Dollar upside to work within. It does provide us with a bail-out area in case I’m being a bit too stubborn. However, I do a similar picture in GBPUSD and also AUDUSD. Actually, having seen USDJPY dip there’s even a possibility this could go down as well… At 77.57 it was really on the border line between a projection from the 79.60 high and a straight extension lower to my lower target closer to the 76.31 low.

All of these would imply a Dollar correction higher but probably EURUSD being more susceptible to much stronger losses. Here we have to consider EURJPY also. It has dipped which was a clear option and is also sitting on a fine line between one more correction higher and a drop towards 105.42… I have always thought this would really take hold only when EURUSD reversed lower – as I said, being the one that has the greater downside risk. Therefore the performance of the cross could be a good leading indicator.

So for today look for the Dollar losses - unless key resistance levels are broken – but be aware at all times from this point forward that the threat of a Dollar reversal is becoming stronger…

Good luck
Ian Copsey

Wednesday, July 27, 2011

The Dollar has resumed losses but a little earlier than expected…

Well, I didn’t get the minor deepening of the Dollar bullish correction and the larger losses resumed directly. Overall I am quite satisfied as that has been the expected eventual outcome. However, it does bring with it a slightly different end target in several cases.

Base line is that we should see losses extend today as well but with deeper targets but once this drop has reached the final targets then I’d expect a sharp turn round in the Dollar’s fortunes for a while. Any break above 1.4696 EURUSD will increase the risk of reversal and we can observe other similar targets also in the other currency pairs.

In particular the Aussie looks like extending quite strongly although I am also aware of the divergences sitting there.

There is little more to be said except be open to further Dollar losses for now and I suspect there’ll be some decent follow-through today – nothing exceptional as there needs to be another correction before the final push to the expected Dollar lows…

Good luck
Ian Copsey

Tuesday, July 26, 2011

Just a little bit more…

If last week ended on a rather dull note then yesterday took a turn for the worst… Dull, boring whippy… well, perhaps with the exception of USDCHF… The bad news is that I can’t see that the slow, dull correction has finished. The good news is that I think it will today.

And then the Dollar should lose out a bit more. I can’t see any change in this basic direction for now although I can’t see it being a smooth ride. Part of the core development I see through EURJPY. That edged lower again yesterday, itself without any great power but there does seem one more leg lower to come and should be fueled by a minor decline in both USDJPY and EURUSD. Neither seem to have much breathing space on the downside but with both then likely to recover – the Euro more strongly than USDJPY – the cross also seems to have potential for one more, messy rally. The fireworks should then begin to sparkle…

The drop in USDCHF has thrown my prior thoughts into doubt. If they can remain somewhat the same then we’ll need a prompt and firm recovery. Momentum is mixed so it’s hard to get a grasp of exactly what it wants to do. From a weekly perspective the trend is quite obviously lower and it’s the persistent shallow pullbacks that are shrouding the structure. A deeper pullback is required at some point – but it’s not clear whether that “point” has arrived…

Other than that, I am changing my mind on AUDUSD although I still feel it’s due a further correction. This does keep it more on a bullish structure overall. USDCAD has formed a structure that can be the foundation of several alternatives… It could be a complex correction or it could generate a second push higher. The longer term remains bearish though…

Good luck
Ian Copsey

Monday, July 25, 2011

We still seem to be in mid-correction but Dollar losses should continue…

The week ended on a rather dull note although that wasn’t really too surprising. Corrections developed and, as has been the pattern of late, the market subsided into a rather slow moving and dull correction. The open this morning brought a flurry of activity but without really generating and substantial change in the overall picture. The correction still appears to be in place but should complete over today, possibly even by as early as the European day and should allow the general Dollar weakness to resume.

Even then I can’t see the losses being excessive or possibly even uniform across currency pairs and certainly the route to the final lows could be quite choppy. The structures are not coming to the choppy segments that should provoke the formation of Dollar bullish divergences over the coming 2-3 days so by the end of week the losses will begin to be pared back.

I do have a few concerns, the main one being AUDUSD which has basically arrived at the area which I thought should generate a reversal. This probably requires a little care itself.

One other area that hasn’t gone wrong yet, and actually performed quite well, is EURJPY. It’s going to be a good one to watch and I suspect will still extend the recent gains but is approaching the end of a corrective structure and also key resistances. Once achieved it will imply resumption of losses and I suspect it will be the reversal lower in EURUSD that will cause the damage. There is still downside in USDJPY that should match the upside in EURUSD but a pullback due. Thus, as far as I can judge it does imply quite forceful losses in EURUSD when this develops. Possibly at a later date USDJPY may well follow-through also but that’s an event to wait for rather than anticipate its development too prematurely…

Thus, start the week with some caution but look for Dollar losses to continue overall… (perhaps with the exception of USDCHF…)

Have a profitable week
Ian Copsey

Friday, July 22, 2011

Yesterday came as a surprise… but also brought things back on track…

Ah! In some ways yesterday was in line with expectations… at least the original expectations which I had begun to doubt yesterday morning… Although the rather messed up and choppy intervening moves from Wednesday (which I still find rather strange) screwed up the analysis yesterday the overall result was quite satisfying in terms of the Dollar reaching towards the targets I had identified earlier in the week.

So I’ll just have to scratch my head, swallow my pride and be satisfied with what has happened. It keeps the basic Dollar move for now as bearish although we are on the doorstep of a deeper correction once again. Overall it does seem to confirm my outlook for Dollar losses but with some adjustments over a few of the pairs.

Following that rather awkward flat correction following the 79.60 high in USDJPY it has finally reached the intervening 78.20 target and is due a brief pullback before dipping below 78… After a further pullback it should reach closer to the 76.31 low before a longer correction higher.

This should coincide with EURUSD scrambling back above 1.4696 before collapsing in a European debt heap again while GBPUSD seems to have a little more to go before it, too has a stronger correction. While all this is going on it should provide an opportunity for USDCHF to push higher as well.

My concern is AUDUSD which I felt should be finding a high now. There is a small cushion above which could still keep this under the threat of reversing lower but this is one to watch and take care. USDCAD seems to have opened up a hole and is threatening to go skinny dipping…

And all this leaves EURUSD plodding along on its own, smiling and enjoying the view but slowly mapping out a corrective path higher… It’s close to a stalling point now and should correct lower. It could even drop more strongly as that is the longer term threat so keep this in the back of your mind and observe USDJPY and EURUSD at the same time…

Have a great weekend
Ian Copsey

Thursday, July 21, 2011

Looks like more of the same…

It’s hardly a riveting market is it? Very clearly the market just doesn’t have any appetite to push the limits. Which is the greater threat? The European debt crisis or the U.S. debt crisis? It’s a bit like trying to work out whether suicide is better than getting shot…

From my point of view I can’t see the current round of Dollar weakness getting too much further. It does still have another leg to go but the writing is on the wall warning of a reversal. What’s more, without any break of significant resistance it could still yet generate a fresh new low in the Euro… but if it does I can’t see it will be by too much.

There does seem to be a fairly clear pattern across several currency pairs indicating the final stages of Dollar weakness. These include USDJPY, GBPUSD, AUDUSD and USDCAD. All suggest an imminent reversal but again, we can’t get carried away as they should only be corrections, albeit potentially quite deep. EURUSD is drifting in an almost comatose state being buffeted by the others but possibly has the strongest risk of a stronger reversal but as I mentioned I doubt it will get too far.

That leaves USDCHF which is still a little hazy given Monday’s gap lower that doesn’t even show on the charts… I do feel the general move should be higher and thus does seem to correlate with the general outlook elsewhere and is more of identifying the corrective low.

Which just leaves EURJPY which was as lethargic as the others but has very limited upside at this point.

Thus today the better prospect seems to be identifying the Dollar lows and looking for the reversal higher.

Good luck
Ian Copsey

Wednesday, July 20, 2011

Still some Dollar losses to come but perhaps not uniformly

Well… We did see Dollar losses overall but not quite as uniformly as expected with USDJPY and USDCHF baulking the basic moves seen elsewhere. I still see more to come but with mixed results again. EURUSD, GBPUSD, AUDUSD and USDCAD all look set to maintain their respective moves. I’d actually like USDJPY to follow-suit but there may be a little more upside to come before that can occur… however, that is stretching the structure rather…

One interesting point about all of this is that none of the above, perhaps with the exception of USDJPY (assuming it does what I tell it to…) and to an extent EURUSD, look like extending the Dollar losses excessively. A pullback appears to be required before too long and I do recommend watching out for the key Dollar supports in all.

I am sensing some continued confused markets still, more in the 1 week time frame maybe, that should prevent the Dollar losing out too quickly but should finally extend losses more directly once this episode is over. The most puzzling is EURUSD which still seems to have an apparent vulnerability after it reaches the 1.4696 high again. Therefore I don’t want to get too carried away.

Having seen the strength in USDCHF yesterday and being made aware of some very, very early shenanigans on Monday morning that were not reflected on the charts I see this as being bullish for a while longer though will probably be a little choppy in the process. Thus, the overall prospects look touch and go to say the least. Best take care in all this apparent confusion.

Finally, EURJPY is showing some strength. I’d prefer this to come from EURUSD rather than USDJPY else my outlook for the latter comes under threat. Again, I feel that if it does then it won’t be for long before the downside becomes more vulnerable. I do feel that it’s just a matter of time before it drops to new historic lows.

Thus, steady as she goes today. I don’t think it’s quite time for a massive trending move so be prepared to take profits when you have them…

Good luck
Ian Copsey

Tuesday, July 19, 2011

The Dollar looks like turning lower today…

I’m not sure if yesterday was successful or not as I was pretty mixed. Directionally most went as expected but having done the analysis this morning I’m beginning to sense that the Euro has failed to develop a constructive decline and thus being corrective tends to point to a resumption of gains…

I have to say that this view tends to correlate with USDCHF, potentially with USDJPY (although it can hardly be described as directional after two days of practicing drawing a horizontal line.) Now GBPUSD may just reverse higher directly but it’s in one of those positions where it could also make a minor new corrective low first. However, the base direction remains higher so even if it does edge a little lower it’ll soon recover back above the 1.6193 high…

AUDUSD is in the same position as GBPUSD although I feel a dip to 1.0525 (and possibly a touch more) is probably the neater scenario. USDCAD should also extend losses though it is rather on a tight rope between extending losses directly and recycling to the 0.9778 high.

Finally USDJPY… Well, there’s not a lot that can be said except I still favor a decline… and one that should come close to the 76.31 low. A market may well come from EURJPY which itself had a rather lackluster day but in a general downward direction. I’d still prefer this to extend losses so it’ll mean that USDJPY must break lower soon and before EURUSD picks up strength… This could provide an interesting balance of play…

Good luck
Ian Copsey

Monday, July 18, 2011

Does the market really know what it wants to do?

Friday turned out to be a bit of a damp squid. After a period of more directional moves the deeper corrections particularly in EURUSD and GBPUSD appear to have left the market rather confused state. As far as I can see the Euro is poised on a knife edge in terms of the next direction while GBPUSD seems to require one more push higher before a correction, possibly even a modestly deep one. If there is to be any correlation then I’d go for a lower Euro that should extend to new lows … but don’t expect the sharper losses that have been seen over the past two weeks.

Just looking ahead a little I do feel that the Dollar is going to switch back into negative mode and one that should maintain the overall bearishness I have been looking for, particularly in USDJPY, USDCHF and GBPUSD. The Euro should begin to recover quite well also but could remain vulnerable to another bout of quivering bellies at a later stage. So the Europeans in particular look as if they’ll start the week with an element of confusion but end the week on a soft note.

Now, USDJPY… can a 40 point range really be accepted as a full trading range? It does present a basic confusion and maybe even a complicated one… Take EURJPY as a marker. It reached the 112.93 resistance well but does seem to have lost its way. The question is whether this completed the correction or whether it’ll develop further in a more complex correction. However, it does tend to put the edge on the downside. That could mean both EURUSD and USDJPY move lower together. I have been looking for USDJPY to move down closer to the 76.31 low but it really does need to get its skates on. Once it gets there the next reaction should be a more sustainable correction.

In EURJPY the downside, when it comes, seems far more aggressive and probably requires a break to new historic lows in USDJPY. Therefore there may be a greater probability that the cross will see a rather messy and complicated correction.

Thus, I feel we need to approach the start of this week with some caution.

Have a profitable week
Ian Copsey

Friday, July 15, 2011

Has the Pied Piper come wandering into the market?

Why? I thought I smelled a rat…

I was going over some charts in the afternoon explaining to a contact that since the 1.6036 high EURUSD has been moving in 3-wave structures. Ok, I use 3-wave structures for impulsive trending waves too as they generate excellent projections. However, if you look at the weekly chart there’s no way you can argue there has been a clear trending structure from the top to 1.1789… It’s a classic corrective structure, or perhaps part of it is…

Take that down to recent price action if it’s going to go down, it must now… otherwise it’ll continue to develop in a corrective manner. Sniff... sniff… The Pied Piper seems to be around… The correction over the past couple of days, while it was expected has extended much higher than I had anticipated. There is always a nasty complication of a deep retracement in a position which you wish it wouldn’t, but there’s also another possibility – one of a total recycling back to the 1.4696 high…

Nasty idea? Well, that’s what corrective structures are all about and why they exist…

Dare I say that if EURUSD gets much higher it could actually fall back into correlation with the other currencies in the general distaste for the Dollar… and that could see EURJPY slow to a virtual halt, a little trait that it has perfected and like to put into practice on a semi-regular basis.

So today is one to be aware of this potential so as not to be too surprised…

Have a great weekend
Ian Copsey

Thursday, July 14, 2011

We should see Euro losses resume today…

Isn’t it fascinating that the world’s reserve currency and the currency that had dreams of possibly sharing that mantle if anything went wrong are both under siege. Yesterday it was basically the Dollar’s turn to take the brunt of the market’s distaste for risk. However, although the Euro has been a little stronger than expected I expect that to resume its steep downward trajectory today…

From what I can see for today the other currencies look like they’re going to have a more rough and tumble day, possibly extending the moves from yesterday but then suffering corrections. I can’t see the underlying distaste of holding anything Dollar related changing for the moment so the corrections should be viewed as selling opportunities, the trick obviously to pick those tops…

USDJPY had a much duller day and I have a feeling that it will continue subdued for today and possibly into tomorrow as well. That still has much further to go on the downside, as should EURJPY. The cross has a little more upside potential but before long it’s going to look vulnerable again. Once USDJPY joins EURUSD on the downside the cross should take some thumping losses that should be targeting somewhere close to the 105.42 low again…

AUDUSD… I read that completely wrong… it too seems to have benefited from the Dollar’s leprosy status. USDCAD looks a bit like a damp squid also…

Good luck
Ian Copsey

Wednesday, July 13, 2011

Whoa! Almost everything’s going down… but probably not today…

I have to make this brief today as the analysis took some time this morning…

Sometimes I try not to get carried away and make alarming calls… I should have done yesterday… Today I shall repeat the restraint as yesterday’s declines were so sharp they exceeded the lowest supports provided in the report… I think we’ll be ok today.

First & foremost EURUSD is paint a rather drastic bearish picture. It does have further to go. However, I think today – possibly into tomorrow – we’re going to see some range trading. This comes from a tiny, blip of a correction earlier on in the bearish sequence which should mean this current correction should be much fatter and longer.

The British Pound MAY have completed its decline yesterday but there is some risk of a new low… take care there. USDCHF … hmmm… Potentially shaping up for a stronger decline but I’m open there. AUDUSD is also shaping up for some strong losses but like the Europeans is probably more likely to see a correction today. USDCAD… needs to rally again but I can’t rule out earlier losses to deepen the pullback.

Now, for what may be the juiciest opportunity to look out for USDJPY. I do have to be a bit restrained here but overall this is shaping up rather like the Euro. It’s almost as if the decline into the end of the year has finally started. It does need just a bit more of a pullback but then risks losses. What I am slightly less certain of is whether this extends losses today or not… When it does it’ll move down closer to the 76.31 low. What does prevent me from saying it will definitely happen today is EURJPY which itself does need a slightly deeper correction. However, with USDJPY and in particular, EURJPY the downside looks rather scary. The next move lower in the cross appears to be targeting close to the 105.42 low…

Good luck
Ian Copsey

Tuesday, July 12, 2011

Well, that’s sorted out the Euro…

The triangle I had been following was not a triangle. The impact of the direct losses is actually pretty bearish… I may possibly be getting too extreme but I wouldn’t be too surprised if this reached the 1.2870 low… However, there’s much too much to sort out in between to get too bearish at this point. Having said that, it’s a possible target and we’ll now need the fractals in between to confirm such an excessive move…

Right now I can’t see that we’ve completed the first part of those fractals… so there’s still a little more to go on the downside before a correction and even then I feel there’ll still be another push lower after that…

OK, the Euro is the Euro, that wonderful, bodged political creation… What about elsewhere?

Here’s the scary story too… USDJPY does not look like a happy bunny. Equally, and probably obviously, nor does EURJPY. In fact, more than the individual currencies, the bearish nature of both seem to suggest quite a nasty fall. If I’m right on that it’s probably the best bang for your buck.

Elsewhere, GBPUSD is still on a downward path but a less aggressive one compared to the Euro so I still feel selling into pullbacks the better option. USDCHF… hmmm… just a bit mixed on that one. Daily momentum has a bullish divergence but weekly is teetering on the edge of extending lower – if that occurs then it could provoke acceleration lower. We really do seem to be on a knife edge here so best work with the larger breaks as I feel a more solid move should soon occur… I’m open to either direction…

The Aussie met its downside target but has struggled to muster enough strength to reverse higher… It must now hold above this morning’s low or it will tumble lower also. USDCAD needs to push above the 0.9740 area to maintain yesterday’s mild upward momentum. If it fails then look for stronger losses…

Good luck
Ian Copsey

Monday, July 11, 2011

Friday caused some major ambiguities…

Choppy indeed… but that’s hardly an inspired outlook on Friday given the fact it was the dreaded NFP day… Having looked through the currencies about half seem Dollar bullish and the other half Dollar bearish. What does that tell us? Time to flip a coin maybe? Time for the earth to shift its axis?

The sharp drop at the tail of the day in USDJPY does not look promising and that also appears to have nudged EURJPY over the precipice. Having said that I’m not entirely convinced that we’ll see that drop directly … assuming it happens. The cross dipped to the top end of the next support which points more to a pullback before any further substantial losses. If EURUSD is to go down then it too needs to dip and pullback higher before the larger collapse. As I pointed out last week, EURUSD does seem poised to confirm a larger directional move and I think that will become clearer by the end of this week.

GBPUSD corrected higher and far more than anticipated. I think it would be a bit of a knee jerk reaction to get too bullish at this point. In some ways I’d like that but the structure is rather ambiguous… I’d rather wait and watch on this as frankly there hasn’t been any clear breaks of range yet.

Swissie? Hmmm… Have been wanting to see this lower but there are clear daily & weekly bullish divergences. However, weekly momentum is at a crucial point and any stronger price losses would imply downward acceleration. AUDUSD still seems to have one more high but would then, at the same time, confirm a more positive outlook but not before a pullback lower… USDCAD – as long as it doesn’t take off too much should actually extend losses…

So, in summary, there are a few conflicts around but also the need for some initial corrective moves. I’d therefore prefer to treat each currency pair separately and wait for the larger structure to make itself known… Continue to exercise care…

Have a profitable week
Ian Copsey

Friday, July 8, 2011

There seems to be an element of make or break for the Euro

Yesterday’s outcome was hard to actually forecast with any accuracy given the rather disjointed positions between the currency pairs but what occurred was mostly in line with the general expectation because of those conflicts. Obviously the market concentrates on EURUSD and this extended losses pretty much as expected and stalled just above one of the projections I detailed at 1.4212.

I’ll concentrate on this in particular as it does seem to represent a halfway house between a larger bullish or bearish outcome. At this point, as I explained yesterday, my preference is more towards Dollar weakness but from other developments yesterday this is not a certainty. Even if I see, in particular, more reasons for long term Dollar weakness against the Swissie, Pound and Yen these all seem to possess some short term Dollar positive structures following from yesterday’s moves. They may well be corrective but right now is not a time to be too fixed on one outcome.

For EURUSD itself there is still a slight ambiguity. It has been developing extremely well within ratios appropriate to a triangle. The question is… “is this a bullish continuation with yesterday’s low being the launch pad, or a bearish continuation within a corrective structure lower?”

The answer lies in the coming move. A direct rally would look very bullish. A dip to below 1.42 would extend the triangle for one more leg higher before stronger losses.

Today is U.S. Non-Farm Payrolls… Whoopee! That means a day when anything and everything can happen and what’s more in a nano-second of sheer panic and terror following a full day of watching paint dry… However, once this farcical event is done and dusted, note the next move as it should provide a stronger clue to the next larger break out…

Have a great weekend
Ian Copsey

Thursday, July 7, 2011

There seems a little more to go on the Dollar downside – but more limited…

There’s some interesting stuff going down at the moment. I am struck more by an apparent convergence of signs in EURUSD, GBPUSD and AUDUSD… possibly EURJPY also… that all appear to be pointing to an end to their declines and the greater risk of a reversal higher. The final reversal signals are not yet in place and should require another push lower. The question here is by how much?

Naturally I tend to prefer the Dollar downside due to my bearish cycles through to year-end. As mentioned before we are already in the larger deviation range around that cycle low so we do have to be alert in case it simply resumes gains but I tend to be against this as the USDJPY low was back in March so just a bit early. However, the sort of decline I’m looking for would appear to need some catalyst and there’s not much around to suggest that right now so some care & attention is still going to be needed in case another holding pattern develops.

What I expect over today is probably more of a slow grind day but seeing those pairs mentioned above edge just a bit lower. The black sheep of those is GBPUSD which does need to make a new low below 1.5911 so this adds just a little more complexity which suggests that any resumption of the upside may well be limited to allow GBPUSD to extend losses into early next week… Well, let’s see, tomorrow is the monthly “let’s panic and cause lots of spikes day” with the non-farm payrolls out in the States.

I sense that even USDCAD will begin to range trade too while USDJPY has been tied up like a dog to a washing pole so it can’t move any further than the length of its leash. In particular USDJPY needs a bigger move with what is likely to be a lot of pent up energy in a coiled spring…

Good luck
Ian Copsey

Wednesday, July 6, 2011

The Dollar looks set to remain firm… but caution is required

I have to say that much of yesterday developed quite close to expectation. Both EURUSD and GBPUSD went down as suggested and these should remain on the bearish side. However, there is a question mark over GBPUSD since although the decline was expected, the deep pullback higher has put the cat amongst the pigeons… To complicate things further USDCHF failed to remain above support and actually crashed much lower which, on the face of things, actually looks a lot more bearish…

For the moment I shall treat USDCHF separately as it does seem to have become more of a favored currency compared to the other two. At the same time I’ll retain a bearish stance in EURUSD and GBPUSD. The former has certainly worked extremely well and I’ll stick with the structure I am following. I do have more concerns about GBPUSD but at the very least it does seem to need one more new low below the 1.5911. That just leaves USDCHF for which I feel we need to work with breaks but the downside here looks favored too.

USDJPY… rallied but stalled just below the 81.26 high. I’d like to say it’ll continue going up. However, even if it does I feel the risk is that it’ll manage only a small breach and then head back lower and then we’ll have to see how far it goes. The controller there may well be EURJPY which also dipped as expected and on the back of the Euro. At the moment the stronger structure here is bullish so I’m cautiously expecting this decline to be corrective. As long as it remains above support I’ll be looking for stronger gains here and this may well coincide more with what could be the end of a triangle and a subsequent break higher. This is still just an outlook but seems to correlate well. At the very least I feel the targeted supports in EURUSD and the cross should provide key support which will dictate the next larger move.

The Aussie still needs to extend losses a little more but I’m still anticipating a subsequent push higher. USDCAD needs to extend losses now or trigger a sharper recovery. Even if losses are seen these should turn into a correction higher anyway…

Good luck
Ian Copsey

Tuesday, July 5, 2011

I think we’re on the verge of Dollar gains but I can’t see these as excessive…

Hmmm… well… Friday & yesterday were mixed bags really… The Euro topped out on Friday but then blipped back higher yesterday while USDCHF extended gains on Friday and GBPUSD made a more sturdy recovery than I had anticipated… It’s all a bit of a mess really but individually there does still seem to be some logic to the structures…

So what’s to happen? As the headlines outlines I still feel there’s Dollar strength to come. However, the depth to which both EURUSD and GBPUSD have extended limits the larger downside. I do feel both are going to top out today and see losses and once again it should be GBPUSD that acts as the front runner. Indeed, that should find new lows over the coming 4-7 days. However, I don’t see the same impact in EURUSD. Here I feel we’ll see continued range trading but more towards the low of the range.

That should leave USDCHF with limited upside for the coming days most likely followed by a return to more subdued and grudging losses over time. So out of the Europeans it still looks like GBPUSD providing the stronger potential for stronger moves.

USDJPY… Oh boy… It makes you wonder whether it’s worth saying much at all as it subsides into one of those long, slow drifts through nowhere. I can’t see it doing much else until we see larger breaks. This should then leave EURJPY with limited upside and as EURUSD reverses lower the cross should be dragged down behind.

AUDUSD actually looks quite bullish. Having said that it seems to require a pullback lower before it can extend gains so slots in well with the expectations against the Europeans. USDCAD is still on its long and winding road lower…

Have a profitable week
Ian Copsey

Friday, July 1, 2011

I’m still looking for Dollar gains but the structures around are pretty choppy…


Please note that since Monday is Independence Day holiday in the States the next report will be on Tuesday

There were some key breaks yesterday which were much in line with the Dollar preference but the start has been exceptionally choppy with the exception of EURUSD which placidly maintained an exceptionally complicated follow-through higher without actually reaching target. I still think it will and with the same result – the Dollar should win through.

It was elsewhere that the market went bezerk. In my form of Elliott Wave there can be this frustrating deep wave B in the middle of Wave 3. Just about everywhere I looked this morning they appear to have been making spikes everywhere, not just modestly deep Wave B’s but ones measuring around 85%-90%... and this in a position that should provide the trend…

USDJPY was a classic… I felt that surely the spike down to 80.26 was just TOO much… but if I tried an alternative count then I had to accept the same kind of spike the other way around… so for the moment I’ll work with the upside but I sure don’t like the way it has developed.

Then USDCHF appears to have broken the bearish structure but that spike higher is sure confusing with its lack of corrections which is normally a sign of a corrective move rather than trending. Yep, sounds strange, but true 90% of the time… If this is one of the 10% then we’ll need a deep Wave B to make this work right…

Then the high in GBPUSD was, I think, a deep Wave B. No problem as I anticipated it but the spike lower does make the rest of the implied bearish structure look a bit stretched…

In all this AUDUSD just kept on ploughing higher with very little in the way of corrections. I do expect a pullback but it’s almost as if it just wants to keep moving higher.

If all that sounds confusing… well, it is! Overall I prefer holding a bullish Dollar preference but I do feel that we’ll have to be pretty observant in case I’ve got that wrong… The day before a long weekend… sharp spikes… Hmmm, does give the impression we may be in for a static, boring day…

Have a great long weekend
Ian Copsey