Thursday, December 1, 2011

Over the edge…

Well, that’s it… Today is the official start of the silly season… Not only is that due to the fact it is now December which will mean that the market will rapidly lose interest in doing anything, but also yesterday’s losses in the Dollar have implied we are now (almost certainly) in a daily triangle in GBPUSD and EURUSD. What do triangles mean? S&M… in the form of false breaks, whips and getting caned.

I pointed out in the U.S. Indices report that there was a risk of direct resumption of the uptrend. Perhaps the central banks got wind of my comments…

Right. Overall I reckon AUDUSD is probably a good buy & hold. That’s due to make a new high over the month whereas I can’t see this happening in the Europeans.

We should see follow-through lower in the Dollar today as more of the market will likely give up on their long positions… This first move will probably be the easiest of the month. Once we get to those lows the month will probably go downhill quickly.

This development may well complicate EURJPY also and much will depend on whether USDJPY maintains its current consolidation structure. I have occasionally mentioned that USDJPY has achieved the minimum projection from the 1982 high around 277.00. Currently it is reacting well within a bearish structure that would keep it within the recent range. However, EURJPY really needs to go lower now to maintain its own bearish structure. This could be a tough thing if EURUSD rallies too high or even if the bearish structure in USDJPY breaks down.

I suggest a lot of care at this point as it wouldn’t take too much to take this off-course. For the moment I’m bearish Dollars all round so it implied a mostly stable cross – but that isn’t what I feel the structure is implying right now. Be aware of what constitutes a break and the implications particularly in USDJPY and the cross…

Good luck
Ian Copsey


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