Thursday, July 2, 2015

DAILY FORECAST FOR USDJPY

INTRADAY CHART
BIAS: We should see a cap between 123.35-54 for losses

Resistance: 123.35-54 123.75 123.98 124.37
Support: 123.00 122.75-89 122.55-60 122.40-45

MAIN ANALYSIS: No losses but a break above 122.90-00 that has seen a recycling to just above 123.18. This looks like extending to the 123.35 - max 123.54 - area. There is a minor hourly bearish divergence. Thus watch for bearish reversal indications for losses to move back below 121.93 and to (ideally) 121.70 (mild chance of 121.41) for a correction back to 122.24-44 before losses down to 121.36 - but allow for a buffer below. Observe for bullish reversal indications.

COUNTER ANALYSIS: Only directly above 123.55 would imply more direct gains and back to the 123.98 high and potentially above to 124.37...

Only directly below 121.00 would risk further losses..

MEDIUM TERM ANALYSIS:
29th June:   This morning's losses imply we shoud be in the last leg lower in the correction from 125.85 and this should mean the 121.35-45 area is the most likely base for gains to resume.

Only back below 121.00 would risk deeper losses to 120.50 at least and later lower.

Good trading
Ian Copsey

Risk of consolidation at some point…

The week basically ends early today with tomorrow’s Independence Day break likely to subdue an already subdued market. This is amplified by the fact that the Greek referendum will be held on Sunday and therefore the risk on early Monday’s trading, when the results will come through, will not really encourage holding excessive positions. Hence the strong likelihood that yesterday’s Dollar strength is likely to be pared back. In the U.S. equity market this process has already developed and is likely to be relatively lacklustre also.

Therefore, while there could still be Dollar gains over today, the risk over tomorrow is for consolidation, potentially extended, until the referendum results are known. Hopefully this will instigate a stronger trend to develop.

In USDJPY we are approaching key resistance where the market needs to make a decision. It’s not a clear-cut certainty on either direction but does have potential to make a break in one way or the other. Still, there could be a brief period of consolidation is quite likely in order to set up the foundation waves for the follow-through. I even see this in AUDUSD also which topped out as expected but does now seem to also need a correction.

As I mentioned yesterday, EURJPY has no opinion on its own and needs to be pushed one way or the other by either EURUSD or USDJPY but from what I see, there doesn’t seem to be much potential for a directional move tomorrow…

Have a great long weekend
Ian Copsey  


Wednesday, July 1, 2015

DAILY FORECAST FOR AUDUSD

INTRADAY CHART
BIAS: We should now be watching for bearish reversal indications

Resistance: 0.7724 0.7743-51 0.7770 0.7795
Support: 0.7680 0.7656 0.7630-35 0.7604

MAIN ANALYSIS: The break above 0.7715 appears to suggest the 0.7585 low was the Wave (i). At 0.7724 we have seen a 76.4% retracement but I can't rule out 0.7743-51. Basically this must top out below 0.7770 for losses to resume and back to 0.7656 and then lower. This would take price down towards the 0.7532-70 area. Note that we have an hourly bearish divergence already.

COUNTER ANALYSIS: We'll need a break back above 0.7770 would extend gains to 0.7795 and 0.7848.

MEDIUM TERM ANALYSIS:
29th June:  Having resolved the consolidation I feel the downside will now develop and there is some way to go. I'll refrain from providing intermediate targets because I'd like to see this current move lower complete for the correction and from that point the targets will become more apparent. 

Good trading
Ian Copsey

A bit like a Greek tragedy

Man 1:      I’m gonna shoot you
Man 2:      You aren’t going to shoot me
Man 1:      I am. I’m gonna shoot you.
Man 2:      Ok, then shoot me.
Man 1:      I ain’t gonna shoot you.
Man 2:      OK.
Man 1:      But I might…

This is a transcript from the Greek debt discussions. “Nowhere” is a great destination for where things are going and that’s just where the markets are heading too. It has made the charts look like a 2-year old kid would scribble and has made life difficult once again. It seems to me as if we’re stuck mid-way between one outcome and another, rather like a drunk trying to walk on the central line in a road.

My underlying view, as I have described, remains firm but there a need for a near-term resolution before the underlying expectation can develop. From what I can see from the structure, there are some suggestions the Dollar can extend its weakness – but the balance across the currency pairs is a bit rough and ready.

Having said that, I would not fight any strength in the Dollar – particularly against the Europeans and Aussie Dollar. USDJPY appears to be a different kettle of fish. I am expecting it to rally but I’m not convinced that it’ll be direct. Such is the mess that the 2-year olds’ scribbles have made.

Needless to say, now is not the time to try and pick the home run. There are enough signs of indecision that it just doesn’t make any sense to go out on a limb…

Good trading
Ian Copsey  


Tuesday, June 30, 2015

The EUR begs to deceive…

That was a roller coaster that I hadn’t expected… Obviously I was sucked into the downside in the Euro and wasn’t expecting the reversal. However, at this stage, I don’t think we’ll see a high above 1.1466 – or if we do, not by much.

To be honest, unless I am deceiving myself, EURUSD looks pretty straightforward now. It’s USDCHF and GBPUSD that hold more puzzling structures. GBPUSD does have potential to correct higher a little deeper but has a relatively wide range in which it can stall. USDCHF should be considered along with EURUSD as to where it will stall. It was the additional new high yesterday that appears to have provided an illogical structure/outcome. Overall, I’m not looking for any substantial/ excessive moves today but I do think that by today – maybe tomorrow (barring some hellish sideways consolidation) – we’ll be back looking for the Dollar to strengthen.

AUDUSD is stretching the limits. I’d like to make a firm statement but there are some risks and the key element is understanding where the upside will indicate a further push higher – or indeed, on the downside, where the bearish move resumes…

Following the early sharp drop in USDJPY, it rebounded but then has remained in a range. At this point it looks like it has stalled in an in-between stage. I can see both sides of yesterday’s range being broken. Whether both will happen over the course of today or whether it will end up fiddling around indecisively is the bigger unknown.

As for EURJPY, the only think I can assume is that the huge gap in the chart contained all the intermediate targets and corrections since, having seen the deep recovery, there is no other explanation… Overall, I still feel the dominant influencer here will be from EURUSD… Therefore, retain the main focus on EURUSD to identify the high…

Good trading
Ian Copsey  


Monday, June 29, 2015

The EU Crocks!

It had to come. Last Tuesday I wrote:

We all know that we have to play the game of sitting still and knowing that, in a split second, all hell will let loose and the market will go totally berserk. Once this phoney process of going through the motions of discussions is over the only outcome will be Euro bearish. The key unknown is where to place stops…”

Already down by 160 points on open, it reflects what the market has been waiting for… The tougher part for me is the information hidden in the massive gap. I have a string of intermediate targets but which one will provide the correction is impossible to judge and even then, I doubt the market will spend much time giving consideration to the depth of the correction.

There has been a mix of reactions in the other currency pairs with the gap higher in USDCHF quite conservative – similarly with GBPUSD. David Cameron must be well pleased with his stance with the EU… Not forgetting AUDUSD, the more conservative dip on open is also reflective of the limited nature of the impact caused by EU meddling.

What has been the out and out loser, far more than EURUSD, is EURJPY. With USDJPY appearing to buck the general Dollar bullish trend by gapping lower by some 100+ points the combined joint venture has seen the cross collapse by over 300 points…

It’s going to take time for this initial furore to die down although overall it will begin to generate a more recognisable structure to follow. However, the fate of the Euro will not be a pretty one for quite some time.

Have a profitable week
Ian Copsey  


Friday, June 26, 2015

EU-wwww…

I had a nightmare last night. I dreamt that the Greek debt discussions continued through the entirety of today, maintaining a dull, drab, dour and dozy consolidation but with the weekend providing an outcome that provoked a 200 point gap on Monday’s open. It brought me out of the dream giving me the sweats. After eventually getting back to sleep I had a second nightmare, even worse and frightening than the first… The market opened on Monday with no solution and the discussions continued for the entirety of next week…

That’s enough to send shivers down anybody’s spine…

In the meantime, this continued sideways move in the Europeans, AUDUSD and USDJPY is still a “threat.” These consolidations cause a lot of issues with the Wave B’s easily developing in their own complex corrections and lots of noise in the lower degrees that make life extremely tough. Over the past few weeks in the U.S. indices we have seen an irregular triangle in a B leg of a larger irregular triangle. Following these is mind blowing… and if there is no solution over this weekend there’s every risk of seeing more of the same.

Looking at the remnants of yesterday’s moves – there seems to be a mishmash of structures that confuses in terms of individual structures. If I see any more likely outcome, then it’s probably a firm USDJPY and weak GBPUSD – but, of course, requiring confirmations. This is partly due to what looks to have been a complete corrective decline in EURJPY. Having said that, the bullish reversal indications are not that strong. Hence the need for confirmation.

Otherwise, unless the EU “discussions” continue through the day, it’s difficult to see any strong desire from the market to stand out on a limb…

Have a great weekend
Ian Copsey