Friday, June 24, 2016

Waiting for the reaction…

It’s Friday. They’re counting the votes… Quite clearly, the market liquidity is thin, very thin and while I was attempting to go through the analysis the whips and swings made life difficult. However, I have been surprised how the market has moved so much. I had expected a quieter lead into the day but clearly the market felt otherwise. I had hoped that the Asian session, things should begin to calm down somewhat but a 300 point drop in USDJPY in the space of less than 5-minutes to make a new low 11 points below an alternative target I have highlighted for over one year… I have to say I was not expecting that drop.

Equally, the other currency pairs have gone haywire and frankly it will be better to allow the market to calm down. Moves of 2%-3% in a blink of an eye are not conducive to trading.

From my charts, forgetting momentum and all the standard incumbent techniques which will be irrelevant in these circumstances, I am looking at the structures. I have had problems with the structures recently – too many whips due to the lower degree noise – but from the combination I have, I still feel the Dollar is going to be the main beneficiary – Brexit or no Brexit. In the Dollar Index we’d need a break below the 3rd May low at 91.92.

In general, once the vote is over and done with, I do feel we are going to see some substantial moves. Be aware…

Good trading
Ian Copsey  

Thursday, June 23, 2016

Getting excited…

We’re going to see some fireworks! Ok, maybe not today but tomorrow all hell should be let loose. Already we have seen some sharp swings in pre-Asian trading and this has opened up what I feel will be an interesting outcome. What caused it I don’t know – but then I’m not really worried. Most likely, as the jolly Brits go to cast their votes, (I’ve been denied… because I’ve been out of the UK for too long…) we are likely to see a jittery day with reactions from the voters in the (probable) range of exit polls. It’s probably better to hold off until there is a stronger outcome.

We’ve seen GBPUSD break above Tuesday’s high – along with AUDUSD. I could describe momentum divergences but this event means that, whichever outcome, divergences become irrelevant. I could mention my Price Equilibrium Clouds but the same irrelevance remains. In or out. It’s nothing more than that…

EURJPY completed the triangle and USDJPY completed its correction. I suspect the stronger moves today will be in USDJPY and to a lesser extent in the cross. It looks like they are both going to be whippy so be aware of the key areas where there should be reactions.

There’s a not a lot more to say for now…

Tomorrow is another day…

Good trading
Ian Copsey  

Wednesday, June 22, 2016


BIAS:      I suspect we're looking at a triangle - but take care

Resistance: 117.75 118.24-45 118.68 119.00-13
Support: 117.40-45 117.30 116.89 116.20-50

MAIN ANALYSIS:    Price is dabbling with the 4-hour Price Equilibrium Cloud - buut generally supporting. From what I have seen, it looks like we are (most likely) in a triangle with support at 117.40-45. As long as this supports we should see gains back to the 118.24-45 area. If seen, this will be the penultimate leg of the triangle and thus the 117.60-80 area should support for gains to resume. 

COUNTER ANALYSIS:    Only below 117.29 would see losses back to 116.89 - take care there but if momentum remains bearish we are more likely to see further losses - noting 115.49-65 and maybe even 114.63-115.00.

Good trading
Ian Copsey

Additional complications

Tomorrow, tomorrow is just a day away… and I’ll be glad when it’s all over.

However, yesterday saw some minor breaks that have caused some problems. Both GBPUSD and AUDUSD made new highs above the prior daily high. I’m not so bothered about AUDUSD because it was a factor of a missed expanded flat at the beginning of the sequence. On the other hand, GBPUSD doesn’t have that excuse. For the moment, it should be heading lower but we’re going to have to be mindful as it declines.

While USDCHF remained as volatile as ever held down by the 4-hour Price Equilibrium Cloud, it is now beginning to break above the Cloud. It still needs a little nudge in the backside, so the early stages of the day should trigger corrective activity, we should, at least see it break from its shackles. On the other hand, EURUSD had no qualms about the losses seen, breaking below the 4-hour Price Equilibrium Cloud – although I’d suggest that it may just go back to test the Cloud low.

So, in general, the Europeans and Aussie are all basically following the same script…

USDJPY spooked me yesterday with its approach to 103.54 but then shrugged its shoulders, waved “bye bye” to the low and set on a trek higher and above the 104.84 high. There is some risk of consolidation but it seems like it has shrugged off its love for the downside and should maintain the upside. Where there is more risk of consolidation is in EURJPY. Overall, I do feel it needs to move higher but it doesn’t have the same urgency as USDJPY.

Overall, I’m not expecting aggressive moves today but once election polls are being gathered for “THE” vote we could see some shivering and shuddering.

Good trading
Ian Copsey  

Tuesday, June 21, 2016

Neutral positioning?

The strength in the “Odd Couple” – that’s EURUSD and GBPUSD – appears to me like position squaring. Following the rather deep losses from late May and early June, the market has not got the appetite to hold substantial positions. At least, that seems to be a likely reasoning for the depth of the recovery. I can’t see the respective peaks (GBPUSD – 26th May, EURUSD – 8th June) being penetrated before the Brexit results are announced. The polls have the two sides pretty much balanced so no one is going to bet their house on such flimsy expectations.

I can still see some repositioning going on but from this point, in the short term, I don’t think we’re going to see excessive moves. There appears to still be some limited follow-through in one or two currencies but other than that the risk will be for a move lower over the coming days but with a much higher risk of corrective structures – potentially complex – that will maintain a platform from where the results will trigger a more aggressive move.

Even the Aussie has approached the 8th June high at 0.7504 but there is a strong hourly bearish divergence. Having said that, there remains a chance that we could see further gains but not above 0.7504.

The JPY pairs have tumbled. I was expecting losses in EURJPY but had not really wanted to see USDJPY drop so low – back to 103.75. Particularly in USDJPY there are some fine lines that need to be observed – pretty obviously the 103.54 low. However, I feel that EURJPY needs to pop back higher and that appears to suggest that USDJPY needs to be the driver. Take care with these guys…

Good trading
Ian Copsey  

Monday, June 20, 2016

It’s that week…

Claims and counter claims. Should the U.K. exit the EU? Will it bring down the EU? Will the global economy collapse following a Brexit vote? Will Brexit make Britain no more than Guernsey? Others say that it will make no difference. Clearly, the claims and counter claims are all hot air and bluff. However, in my neck of the woods, it’s making life difficult in terms of the structures. There has been some weird things happening – well, at least in terms of stretching some of the corrective moves that appear to have caused some unusually excessive recycling. It seems to be that way…

Most probably the market is going to see some erratic moves over the coming days and therefore we’re going to need to be fleet of foot. Already this morning all pairs have seen some modestly strong gaps – but ones that need to be confirmed if they are to follow-through. I’m not yet convinced of that outcome. It’s not yet the time to make a strong directional statement of intent.

Therefore, we could find ourselves embroiled in some whippy, correctional moves over the coming 5 days. For the moment, I prefer to consider the Dollar to be the beneficiary of the melee - but of course with the attendant risk of whiplashes and potential confusion due to the week that everyone wished wasn’t.

Take care. If not convinced of a trade it will be better to sit out…

Good trading
Ian Copsey