Thursday, January 19, 2012

Just a bit more…

I can’t say yesterday was particularly tidy but the Dollar continued its correction lower as expected. I can’t see that it has ended yet either but it’s not a million points away now. This overview of further limited Dollar losses appears to be reflected across all majors except perhaps USDJPY and possibly to minor varying degrees. I’d even suggest that this overlaps to EURJPY which has also extended its choppy pullback but to within touching distance of decent retracement ratios.

Once the Dollar low has been seen we should see another round of gains – possibly into early next week – that should mark the end of this segment of the Dollar strength and for a much deeper pullback lower over the coming 2-3 months.

I’ll add one more point. Having seen USDCHF drive lower I feel that it found its top at 0.9595. There is just a minor risk of a marginal new high – and that’s by a slim slither – but I think it has done enough and therefore the recovery should just be a correction. Otherwise I expect EURUSD and probably GBPUSD will form new lower lows. AUDUSD risks a much deeper correction. EURJPY should also take out the 97.03 low for another low before a pullback.

Now, just where this leaves USDJPY is more of a guessing game. For some while 10 points seems like a massive move and does give the impression of still being in a mighty long sideways consolidation. It’s still possible this can continue if 95.95-00 supports… However, even if it does continue there should only be one leg left in the consolidation so overall we should be looking for a more directional move sooner or later – and the way things are going the longer side appears more appropriate.

In summery for today I feel we should be looking for those Dollar buying areas…

Good trading
Ian Copsey


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