Thursday, April 24, 2014

DAILY FORECAST FOR AUDUSD

BIAS: We need the 0.9255-67 area to remain supportive and for gains to push back above 0.9320…

Resistance: 0.9312-20 0.9340-45 0.9361 0.9377
Support: 0.9278 0.9255 0.9225-35 0.9205

MAIN ANALYSIS: Losses came sharply but remained above the deeper 0.9255 retracement level. There is still a minor risk of seeing 0.9255 but with a shallow inverse head & shoulders we should see some gains and probably trigger a firmer rally. To confirm this we shall need a break above the 0.9320 area. It won't rule out corrections so take care. However, overall we should now see more positive progress back above 0.9340-45 and 0.9361 to approach the 0.9377-90 area...

COUNTER ANALYSIS: Only below 0.9250 would confuse and risk a move back towards the 0.9205 low…

MEDIUM TERM ANALYSIS:
21st April:  The strength seen just before I left was a big surprise and suggests a recycling back to the 0.9756 high. This will require the 0.9255 - 0.9295 area to support for gains back above 0.9460 to reach 0.9520 at least within a larger rally.

Any earlier break below 0.9255 and 0.9205 would risk a longer term irregular consolidation but overall weakness.

Good trading
Ian Copsey

Complications set to extend consolidation

The market certainly seems to be very reclusive. This is very evident from the type of structures that have developed over the past couple of weeks, possibly even from the start of the Crimea issue. The lower degree moves are very jagged and defensive with no free-flowing confidence in pushing the Dollar one way or the other. It has required very detailed and intensive attention to each and every move in the 5-minute charts. Equally, this raises the risk of misjudgement.

Well, yesterday provided yet another example of a breakdown in expectations but unfortunately in a way that threatens further range trading and tight consolidation. We do, of course, have clues from the higher degree structure but the spider-like, scratchy development can extend the pain until eventually something, somewhere needs to break down. It’s not likely to do that today or tomorrow.

The Aussie should have a stronger day today as long as the support I’ve provided continues to hold. Potentially this pair could provide a decent move. I will add that I am a bit reticent if only because the market is hardly in the mood to sustain any move at all…

In the JPY pairs there is a growing sense that something else is developing. In EURJPY I had been looking for a potential triangle but the long, ratcheting, sideways move has made that structure lose balance. Indeed, there could be signs of strength although I feel this will require USDJPY to fuel the rally. Thus, if this is to happen, make sure that USDJPY makes its intent known as I'm not that convinced that such a rally can be sustained. Thus be aware that development could still remain a little groggy.

Overall, the Europeans are all at sixes and sevens but I think today the risk is for the Dollar to provide more upside than down. However, I can’t see any home run. The same may well be probable in the JPY pairs. Therefore take your profit when you can and take the trades that have more clarity. Even a small profit will add strength to the underlying capital.

Good trading
Ian Copsey  


Wednesday, April 23, 2014

Further congestion trading

While we did get some modest moves yesterday they weren’t quite as firm as I had wanted to see. While one or two of the Europeans have a structure that could trigger firmer moves there are also others that have not completed a particular section of a wave and restricts the ability for the Dollar to make any stronger move at this point. In particular USDCHF is a little behind EURUSD and GBPUSD has developed in a manner that could maintain its own consolidation. I’m therefore not confident that we’re going to witness any strong moves today…

Thus, the risk today is for range trading and quite possibly mind numbingly boring… It will be well to also note the boundaries of the range that would provide the trigger for a breakout just in case any catalyst raises its head to push the Dollar one way or the other…

An alternative angle to observe is in EURJPY to judge whether this can provide any insight. I have been playing the “range trading” card here for a couple of days and while it has done just that it has been extremely static overall. The more this develops without making a modest shift on the upside the risk of a larger move will be highlighted. If anything it’ll be more likely that USDJPY takes up the slack here rather than EURUSD. Perhaps it could even be both but I suspect that is less likely at this point.

Having said that USDJPY is still restrained within its own, very sluggish structure. It should be closer to completion but the development has been in slow motion and at this point it’s not really showing much determination to breakout on its own. However, here too, the requirement is to understand where the break levels are.

Finally the Aussie managed to make further gains but not yet enough to confirm a resumption of the upside. Thus, until the break higher is seen there still remains a risk of a slightly deeper correction. Thus, bide your time and maintain patience…

Good trading
Ian Copsey  


Tuesday, April 22, 2014

WEEKLY OUTLOOK FOR AUDUSD

INTRADAY CHART
22nd April:
Within the adjusted bullish outlook we have either seen Wave -iv- or will between the 0.9281-0.9305 area (27%-33.3%) (max 0.9255 - 38.2%) for gains in Wave -v- too the Wave (iii) target between the 498.4%-523.6% projection at 0.9520 - 0.9562. 


Once seen we should see Wave (iv) correct lower by around 14.6% - 33.3% retracement to the 0.9273 - 0.9435 area. This should then provide the basis for the uptrend to resume in Wave (v) to the daily target area.

RATIO TABLE
Good trading
Ian Copsey

Modest follow-through?

The rather slow and cumbersome conditions yesterday were hardly a surprise although did manage to finally generate some enthusiasm to generally extend the Dollar’s recent gains. With the Easter break over and done with the market is in a position to capitalise on those modest gains and follow-through. All we need now is some demonstrated enthusiasm.

Having said that, it is probably worth watching the development in EURJPY which managed to extend marginal gains. I’d rather like this development to continue and if so it would suggest more that USDJPY will provide the required impetus. It’s not that I feel the cross will see robust gains but certainly a little higher within the range would be encouraging. Once it has met its target the potential for EURUSD to take over is higher. The only risk is that I may have misjudged the cross but this would be obvious if the day starts on the downside.

The Aussie edged lower as expected and is approaching a key support area that should decide whether it continues its decline or bounces. Watch this area closely for signs of the outcome I suggested yesterday. 

As for the Europeans, it was good to see GBPUSD withstand the general Dollar strength that was seen against EUR and CHF. This is probably a key relationship to watch as I feel there will be a coming together of the Europeans before too long. How this will develop over the short term is a little unclear since there is some leeway on both sides of the market. However, in time I feel this will come to a consensus soon.

Today should see some stronger moves, not necessarily robust but healthy none-the-less…

Good trading
Ian Copsey  


Monday, April 21, 2014

Dull start to the week

Back behind the desk after a week off… seven days in the U.K. and no rain which must be a rare event…

The past week appeared steady, initially seeing modest follow-through on the Dollar downside but then reversing. I have to say that the structures have been pretty complicated and certainly fraught with potential for misjudgements. Given that today is a partial holiday due to the many centres that are taking Easter Monday as a break I really can’t see any dramatic developments, a factor that could imply a messy day. Drawing from observations over the range of currency pairs it appears to suggest a more Dollar bearish day overall.

I see this process being one of completing corrective structures although in GBPUSD the expectation is for completing a terminal trending structure. Indeed, this could be a good vehicle to watch in terms of identifying the reversal points elsewhere…

The strength in AUDUSD came as a surprise and does seem to suggest a recycling process although there should be a greater degree of leeway here, potentially baulking in terms of Dollar gains. However, there is a “however” that could risk a move complicated daily corrective structure. For now it is just an observation but take note of key support & resistance here.

USDJPY has a potentially more complicated outlook and therefore requires a higher level of care. I did initially come up with a decent structure in the hourly charts but I’m not quite so confident of the lower-degree development supporting the higher degree. If there is anywhere to provide any insight to this it could well be in EURJPY that pushed higher over last week and tends to suggest that it could see further strength although the risk in this scenario would be for choppy development.

For today, as mentioned above, the chances favour a dull day but perhaps this can provide a little more insight to the next larger move…

Have a profitable week
Ian Copsey  


Friday, April 11, 2014

EASTER BREAK

Please note that I shall be taking a break and will be back on the 21st April. 

Good trading
Ian Copsey