Thursday, July 24, 2014

DAILY FORECAST FOR EURJPY

INTRADAY CHART
BIAS: We should see a general drift higher

Resistance: 136.85-95 137.23-33 137.50 137.90-08
Support: 136.40 135.87-19 135.60-70 135.37

MAIN ANALYSIS: Price saw a low in the higher support target at 136.35-45.  This should now provide a correction higher although the depth is a little difficult to judge. It could be as low as 137.33-43... so do be aware of the downside risk... However, I tend to prefer a ,move to the 137.90-08 area or as high at 138.75-139.10. Right now the near-term resistance areas are at 136.85-95 and then 137.23-33. The risk is for both to provide a correction. It'll take a break above 137.40 to see gains extend to 137.90-08...

COUNTER ANALYSIS: Any earlier break below  136.40 would risk 136.00-20… break there would suggest extension to 136.60-70 and 135.37.

MEDIUM TERM ANALYSIS:
24th July:  The 136.35-45 area held and this should allow a correction up to the 137.90-08 area at least - potential to as high as 138.75-139.10. We should be observant from 137.90 for any bearish reversal indcations as it would imply new lows...

Only above 139.50 would begin to see the larger daily downtrend break down...

Good trading
Ian Copsey

A strangled market

I’ll start with a subject that has nothing to do with where the market is going but more providing an insight to market behaviour this year – the average daily range. Here are the stats for a 21 period average daily range comparing to one year ago. Values shown are for July 2013 and today in points:

EURUSD         107                 42
USDJPY          169                 33
USDCHF         100                 30
GBPUSD         130                 60
AUDUSD         149                 52

These are the lowest readings in something like 15 years, the length of the data I have immediately available. I have noticed that during this period, whenever we see a dip in daily ranges the outcome has often been an aggressive trend developing. I can’t say how long it will be before this occurs, but I do feel that over the next few months we’ll begin to see this developing…

Right now, these narrow range days are producing tiresome and irritable noise in the market that make identification of waves far more challenging. It’s like being tortured in the medieval ages. Right now EURUSD and USDCHF do still retain the 4-hour bearish divergences. There is potential for hourly also. Following the drop to new lows in GBPUSD – and a bullish divergence there – we could be seeing a potential measure of the next move. The same is true of AUDUSD that provided an amazing display of stretching the limits yesterday.

Thus, the short-term structures should soon provide a break that will help us a tad more. I’m not sure it’ll be the bigger moves we want just yet, but it should add one more layer of information.

Meanwhile, USDJPY continues to (slowly, ever so slowly) make its way higher. I don’t see an end to the sluggish and frustrating development just yet with a correction to these gains required before any more aggressive moves can be seen. This tends to map onto EURJPY also that should have found a temporary low yesterday but should be only for a correction.

Today looks like a similar day to yesterday, and the day before, and the day before that… slow…

Good trading
Ian Copsey  


Wednesday, July 23, 2014

Is the market spoofing itself… or me?

And I don’t mean the drinking game but more the art of trickery or perhaps self-trickery. Yesterday’s Dollar gains in the Europeans were always an option even if I had begun to think perhaps they’d not develop. In seeing that follow-through higher, the Dollar has lost its hourly bearish divergences but still maintains (the potential for) the 4-hour bearish divergences. Again, this applies to the two Continentals. However, there doesn’t seem to be much room available on the upside without breaking some key projection targets – which consequently implies that a deeper correction (to yesterday’s rallies) should be seen.

Now, adding into the fray, GBPUSD has dipped modestly and a little more than I would have liked but with the structure of the recovery from 1.7035 it does lend itself to a complex correction. Should this develop the upside has a relatively obvious retracement area but I’m not sure how this can be interfaced with the Continentals unless it goes solo. Overall, this scenario is tending to point to a shallow correction lower in the Dollar…

Elsewhere AUDUSD is proving its reputation for making hard work of what should have been simple development. At least, it’s either that or something else is happening and in the making. Thus, watch the key upside targets and also where this all breaks down. However, from the description of the Europeans there is a broad element of correlation.

USDJPY rallied quite well, although fell a little short of my target. It seems to be in a sideways consolidation but overall this does still remain bullish. We just have to be patient…

The weakness in EURUSD clearly limited the upside in EURJPY to just below my preferred retracement target. Here we may have a clue since there are some higher degree projection targets just a bit lower. They should provoke a correction higher and this may well fit in with a shallow correction in EURUSD. There is an alternative that would suggest a much bigger reversal but doesn’t seem to fit well with GBPUSD.

Therefore, today looks more like another workmanlike session but one that should hopefully contribute to the larger wave degree outcome.

Good trading
Ian Copsey  


Tuesday, July 22, 2014

DAILY FORECAST FOR AUDUSD

INTRADAY CHART
BIAS: While 0.9346-64 supports we should see the rally extend to 0.9446

Resistance: 0.9380-83 0.9395-00 0.9419 0.9446
Support: 0.9346-64 0.9328-35 0.9305-10 0.9280-85

MAIN ANALYSIS: It was a dreadfully slow day but we are now seeing price dip into  the 0.9346-64 support area. From here we should see the rally extend to the 0.9440-46 area. This should see a correction down to around 0.9400-10 before higher to 0.9460-65 (max 0.9480-85...) From here the downtrend can resume.

COUNTER ANALYSIS: A direct break below 0.9340 would annoy and imply losses below the 0.9328 low and then to 0.9280-85 at least… potentially further…

MEDIUM TERM ANALYSIS:
21st July:  Friday's recovery is more in line with a move back to the 0.9460-85 area. In the process the 0.9346-64 area must support. Once seen we should see the downtrend resume.

Only back below 0.9328-40 would confuse but should see further losses…

Good trading
Ian Copsey


More of the same…

I can’t say I’m too surprised about yesterday’s developments. Mild Dollar losses, nothing too exciting – perhaps even a bit dull given the lack of follow-through – but given the fact that price was battling with the (Dollar) bullish 4-hour Price Equilibrium Clouds, it’s probably exactly what we should have expected. What this does mean is that price needs to make up its mind whether it will make a clear penetration or resume the bullishness. This will be the focus over today.

Almost certainly Asia will maintain the status quo until Europe arrives at its desks, which could see further drifting like the fluffy white cloud that’s wafting across the sky now. That Japan will be back from their Green Day holiday will probably make not one iota of difference given the seriously sluggish development we’ve experienced for quite some while. However, what I have spotted is a potential issue when trying to correlate USDJPY, EURUSD and EURJPY. While I realised a small error in my count in the cross (but not one that makes too much difference) the upside doesn’t appear to suggest particular strength. Given USDJPY should be overall bullish, it tends to suggest EURUSD has limited upside. The resistance area in EURJPY is quite clear so I’d suggest watching this and for any reaction in either USDJPY and/or EURUSD. This will hopefully provide some insight into all three pairs.

The Aussie went into slow motion, mainly sideways but with a bearish drifting-lower bias. It could still suggest the support area I mentioned yesterday, but overall the observation of a recycling I mentioned yesterday does still seem to hold the main theme. It could well be a slow day again today.

Today, it’ll be important to note the key levels that could provide pointers to the next larger move, but like yesterday there does seem to be a bias towards dull trading once again.

Good trading
Ian Copsey  


Monday, July 21, 2014

Leap taken. What next?

So, EURUSD was the leaper. Actually, it wasn’t too surprising given the momentum conditions. The question is more whether it’s tied to a bungee cord. In this segment of the Dollar’s upside there is a little question mark – will it take a second dip or will the bungee cord return the Euro back above the starting platform? As we start the week this is the first puzzle to solve. There are hourly Dollar bearish divergences across all three Europeans but ones that could absorb one more follow-through. Therefore, take some time to observe this. Whichever develops, the outcome should be a deeper move back lower in the Dollar.

This tends to be suggested in AUDUSD also that surprised with its strength on Friday to break the bearish sequence. The early part of the day will provide the same choice by the market as explained above in the Europeans, but the final outcome will be higher but I suspect in a relatively choppy manner.

The barrier at the 101.35-45 area worked quite well. It was a natural resistance point but the more difficult part was judging whether it would provide a temporary or stronger barrier. Obviously the latter has occurred. We still face that issue as the week starts but I don’t think it will be for too long. Are there any clues from EURJPY? I think so, although using this method to try and solve the problem is one of those suck-finger-and-stick-it-in-the-air processes.

If I am to go with what I see in EURJPY, it looks to be as if we shall see EURUSD dip to a new low, taking EURJPY with it before both EURUSD and USDJPY both make upward progress.

In terms of significant moves, I don’t think we’re going to see a runaway market today. The current pattern of hit and run still seems to be dominant.

Have a profitable week
Ian Copsey  


Friday, July 18, 2014

DAILY FORECAST FOR USDJPY

INTRADAY CHART
BIAS: While care needs be taken, we should see the uptrend resume

Resistance: 101.35-45 101.57 101.79 102.10
Support: 101.06 100.75-82 100.54 100.23

MAIN ANALYSIS: Yesterday the market took the bull by the horns... and then let go… to free fall down to 2 points above the 101.06 low. It hardly generates great confidence although there is an hourly bullish divergence - but the swing high much higher at 101.57. So to be more confident of this rally this is the technical point that would see the gains extend. One additional indicator is the 24 & 48 week cycle lows being seen this week. Therefore, I do feel we'll see this back to the 101.79 high over time and probably to the 102.26-35 peaks at the very least but will take until early next week. Also note the higher 102.79 high.

COUNTER ANALYSIS: Only a break below 101.06 would destroy my structure completely. I'd have to review but overall would imply losses down to 100.75-85 at least and we'd have to see if that area breaks…

MEDIUM TERM ANALYSIS:
15th July:  I'm not sure I liked not seeing one more drop but the break above 101.45-50 was enough to break the bearish sequence and with the 24-week cycle low suggests we are about to see a larger rally develop that should reach above 102.79...

Only below 100.75-82 now would risk losses to 99.52 and max 98.65...

Good trading
Ian Copsey