Wednesday, September 7, 2011

Further to go… but corrections required soon…

It sure was an S&M day yesterday… whips were lashing out in a frenzy…

The Dollar has strengthened and frankly it’s hard to fight against this right now. I’ve had to review the daily and in some cases weekly charts. I thought I’d turn totally Dollar bullish – the type that would confirm the 16.5 year cycle low. Maybe it will but I do still see potential obstacles. Obviously the shorter term charts look pretty battered but the daily, and more the weekly, haven’t really technically reversed. The U.S. equity market wasn’t too impressed after their gap lower from Friday’s close and actually closed at the day’s highs after getting quite close to the support levels I had indicated in yesterday’s report.

Indeed, while there does appear to be room for minor follow-through in the Dollar strength early today I’m expecting a correction and one that could be quite deep. Therefore I don’t recommend getting into the Dollar rally at this stage but there should be opportunity over the next day or two.

The strength seen in USDJPY has confounded but in some ways makes the downside targets a more comfortable projection. I’m not quite giving up on the downside yet. Maybe I’ll be forced to later but only when there is a stronger signal of a larger reversal and frankly that won’t come until above 80.23. It has also caused EURJPY to become somewhat ambiguous. Again, there’s no break higher but a little conflict here or there that needs clarification. I wouldn’t even be surprised if it goes into another of its sideways consolidations…

So today needs some kid gloves I think, and a good deal of observation if my thoughts of a Dollar up-down day develops…

Good luck
Ian Copsey


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