Tuesday, September 13, 2011

I feel we may see some consolidation for a day or two…

At long last I think I’m getting the feel of this forced change of view but there are some minor wriggles and vulnerabilities that need to be observed over the couple of days where a sideways consolidation could develop.

First of all, not exactly where I had placed my bet but we finally saw some Dollar highs and a pullback. In one way we do seem close to completing a correction. I say “a” rather than “the” as this initial correction has developed in a way that could warn of a more complicated consolidation. In fact, I tend to prefer that view when looking back at earlier price action. This should relate mainly to EURUSD and its new piggy-back partner USDCHF – oh, and possibly AUDUSD and USDCAD…

Elsewhere GBPUSD appears to be playing some games. Yesterday’s low was a trice below expectations but not along way but the manner of the decline was not quite what I was looking for. What’s more, the recovery from those lows was not what I would have expected in the structure I was looking at. It was quite feeble whereas there should have been a much stronger reaction. Therefore I suspect some shenanigans…

Some while ago I took a look at GBPJPY and thought… “oooh… bearish…” I can’t see GBPUSD matching EURUSD & USDCHF and feel the downside risk is now stronger – exactly what GBPJPY needs. Therefore be wary of this currency as the risk remains lower and momentum tends to point to that.

Watch USDJPY also. Yesterday’s drop is looking quite bearish and I wouldn’t be surprised to see extension towards the 75.94 low. It still has a small window to allow another push higher but needs to do so quickly else it’s time this went lower and probably more directly than before as new PM Noda has more than enough on his hands with political politicking, sabre rattling and thinking up ways to make the electorate like him.

EURJPY is doing ok. Yesterday’s low was not the one I had envisioned, but it’s in line with the negative structure I have. If it has any higher to go then it’s not by much and this cross looks heavy too…

Good luck
Ian Copsey


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