Thursday, November 3, 2011

A delicate status quo…

No beams of light shining yet but there may be a slight opening in the clouds allowing slim sliver of silver slipping through. However, it’s much too early to start making claims of a reversal lower in the Dollar. If this reversal is to happen there seems to be limited room in the Dollar Index, but it wouldn’t surprise me to see marginal new highs first. In fact, I’d actually feel a little more comfortable if this final push higher did occur. In GBPUSD and EURUSD there is even a potential risk of sideways consolidation – although this doesn’t appear to be an option in USDCHF which probably heightens the potential for those new Dollar highs elsewhere…

Right now the market appears to be playing a waiting game, the structures developing providing several avenues that could be followed, both bullish and bearish in the near term, without committing to a more sustained directional move. With the fundamental background being what it is, that seems to be pretty obvious. It does, however, raise the risk of some messy, choppy trading ranges and thus the need to be rather cautious with positions today.

My preference remains for the Dollar to come out of this weaker. However, I’d not fight a stronger Dollar since as I mentioned yesterday there are still two very clear alternative structures that could develop through to the New Year. Beyond, through 2012 I still see the Dollar a very clear winner and with what should be a solid uptrend emerging over the early months.

Still, today we have to face the potential complexities, corrections that cloud collective considerations and cautiously cope with care…

Good luck
Ian Copsey


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