Monday, October 31, 2011

More Dollar losses to come…

While I had looked for a pullback first on Friday I hadn’t reckoned on it taking ALL day… Whew… what a grind… Bottom line is: the Dollar still has further losses to come and the first few days this week look like being predominantly bearish. Today should provide a lot more information about the final stalling point in this decline depending on how deep the current correction stalls. Deeper gains in the Dollar, however minor, will reduce the final upside target. Direct losses will retain quite a bearish outlook for the first few days of the week.

This deeper pullback versus direct follow-through today is very critical. Direct losses would see a dip, correction and stronger dip before a deeper pullback. Any earlier deeper pullback and extension would imply lower projection targets and then a deeper pullback… Thus, watch how this develops today as it will tell us a lot about the final downside target.

A note on GBPUSD. I have been particularly bullish on this one but last week just didn’t generate the strength I had been looking for. In fact, when relating this to the position within the daily structure it appears to have been forcing itself into a corner. Therefore, there chances of this getting above 1.7042 appear to be waning every day. It does still have further to rally and broadly similar to the Euro but the manner of the rally from 1.5271 just hasn’t been what is needed to avoid losses below that low. Thus, be aware of when this current round of Dollar losses comes to completion.

Finally, USDJPY… dipping again on open today but still above crucial support… I remain bearish overall and actually still feel there is some way to go – but not directly. The move lower from 76.48 has been typically corrective in nature so expect this to recycle higher before it can make a more sustained effort on the downside.

Have a profitable week
Ian Copsey


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