Thursday, September 29, 2011

The deeper correction has further to go…

The development of the Dollar correction lower proved to be more laggard than expected but has actually provided a much stronger feel to what’s happening… I think… Today should see the Dollar losses continue or depending on the speed of the move perhaps just revisit the lows we have seen so far. There should be more to go and I feel that by the end of tomorrow the Dollar will have lost more ground and probably to penultimate lows ahead of a final push before a reversal higher.

The story spreads across all currencies – except perhaps USDCAD which should continue its rally and AUDUSD which looks to trade in a sideways consolidation.

A word on USDJPY that gave me a headache first thing as it rushed back towards the 76.96 high. It looks like it will continue in the 76.10-80 range for today at least, maybe into tomorrow given its propensity to find the least efficient route. While it holds below the range high the risk remains lower.

This slots in with EURJPY that has still a way to go on the upside in this correction. As much as it has recovered it should be just a correction with the next drop facing the risk of approaching – maybe even breaking – 100. All JPY crosses remain in a downward path with temporary breathers for corrections. They still remain the clear picture for me over the coming weeks.

Thus, today should be a day to look for Dollar losses…

Good luck
Ian Copsey


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