Friday, September 30, 2011

Dollar losses still to come… but maybe not today…

For the most part I was happy with yesterday’s analysis. With the exception of USDJPY and EURJPY the early Dollar resistances held within 1-2 points to prompt Dollar losses. Having seen them I have to say I can’t get too excited about seeing them follow-through at this point. The greater impression I got from just about everywhere (except USDJPY and EURJPY again…) is that we’re going to see out the week on a rather lame note. The implication appears to be for some consolidation, range trading and general fiddly, annoying corrective structures.

If there is anywhere which has more directional potential then it’s in USDJPY and EURJPY… Even then I’m not totally certain of this. Yesterday’s push above 76.85 has rather muddied the waters. The entire development since the 76.11 low has been one of confusion but to the point that there is a growing risk that it could push higher, perhaps in a more complicated correction to the drop from 80.23 that could see this back above 78.00 again.

The clues from the cross, however, are also mixed. It does still have another 100 points to rally, maybe a little more. It could occur directly should EURUSD remain subdued as I feel today but driven more by any strength in USDJPY. It’s more one to watch for and take advantage if it occurs. Once that move higher in the cross is done & dusted then the bearish risk returns for the drop to… and possibly below… 100.

To be honest, if you want a long weekend I think this would be a great opportunity…

Have a great weekend
Ian Copsey


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