Friday, May 27, 2016

Modest boring movement

A Dollar bearish day. Not that it had much momentum behind it, but modest progress at least that edged price across the 4-hour Price Equilibrium Clouds. Having said that, there has been no significant break so there’s a risk of the Clouds acting like a sticky flytrap that will keep attracting moths back to the Clouds. We should see follow-through but I’m not too sure that it’s going to trigger a significant move, particularly as we’re going into a long U.S. weekend.

If there is any puzzle, it’s the slight disconnect between EURUSD and USDCHF in terms of the larger structure – but that has been a pattern of note for quite some while. I can certainly see that trend continuing. Out of the three Europeans it has been GBPUSD that has been most consistent. It’s not the easiest of pairs to follow but currently it’s basically plodding a long, marking its way but with a slightly better trending move compared to its soon to be ex-partner. I still feel it’s an important currency pair because it is in a different part of the structure compared to the Continentals and this could help identify common reversal points.

AUDUSD pulled back deeper than I had wanted. I suspect this was due to my conservative outlook but now appears set for a deeper target.

The JPY pairs whipped back down, then whipped back up and then became dizzy. In particular, EURJPY made a rather strange decline that has made me step back in order to observe. The “offending” action was a very deep pullback and followed by a minor new low but didn’t look constructive. There seems no doubt that USDJPY will move lower but it is probably better to let the next move develop to confirm my suspicions – or not – as the case may be…

A bit of blurb from Meddlin’ Yellen tonight. Not sure it’ll be of any substance but watch out – we do have a puzzle in the U.S. equities…

Have a great long weekend
Ian Copsey  
  





Thursday, May 26, 2016

Busy going nowhere

… and it’s most certainly a crime… I’d like to be very happy, but… everything takes a time… (which for the more youthful, is a song from “A Connecticut  Yankee in King Arthur’s Court.” Perhaps it should be changed to Queen Janet (Yedlin’s) Court…

It has been a slow, cumbersome, sluggish, lackadaisical and creepy, crawly development. Very clearly this isn’t going to last forever, even if it has felt like it, and no doubt the trigger will be the 23rd June. For the past week I have been pointing out the 4-hour Price Equilibrium Clouds that have been providing a barrier to the (Dollar) downside in the Continental Europeans and this remains a factor – but once again threatening to break. Will it, or won’t it? Well, that is the 64bn Dollar question.

Meanwhile, in the Europeans, GBPUSD has been ploughing its own field and continues to make solid gains. “I say chaps,” says the intrepid British Pound, “what are you chaps up to? I can see blue skies…” Indeed, there will be a point where the Continental Europeans will play tag and follow the Pound to its summit. Well, we’ll be running into some barriers on the upside before long and should slow the upside progress.

As for the Aussie… yesterday saw it go on a walkabout. If I’ve been talking about fine-lines between bullish & bearish recently, we’re pretty much in the same boat when it comes to the Aussie. It won’t need much more than a sniff or two to see it go higher – but it’s still touch and go.

Both JPY pairs made gains but hardly in any stunning style. In particular, EURJPY has a modestly broad range in which it can play and play and play before it has to make a decision. I reckon we’ll see this develop but likely allow follow-through lower later. However, there are clear points where one scenario ends and a new begins. USDJPY has been taking minor steps here and a few trips there. I suspect more of this but it can hardly be considered a robust move at this point.

If there’s any possible decent move today it will be at the courtesy of the 4-hour Price Equilibrium Cloud’s acquiescence in allowing a breach in the Continental Euopeans…

Good trading
Ian Copsey  
  



Wednesday, May 25, 2016

DAILY OUTLOOK FOR EURJPY

INTRADAY CHART
BIAS:      This has two options - directly bullish or a pullback higher and minor new lows (but above 121.47)


Resistance: 122.78 122.95-00 123.40-47 123.70-75
Support: 122.34 122.10 121.75 121.47

MAIN ANALYSIS:     I remain neutral for now. I can see a completed correction but there is still the option of a correction higher - holding below 124.04 - and then a 3-wave move back below 122.34 but must remain above 141.47. I tend to favour this but there is a delicate balance between EURUSD and USDJPY. There appears to be limited upside in USDJPY for a correction back to yesterday's lows while EURUSD should see a reversal higher but will still see resistance from the 4-hour Price equilibrium Cloud...This could therefore prompt the final 3-wave move lower but which would have to remain above 141.47...

COUNTER ANALYSIS:     Thus, only a direct break above 124.04 and 124.17 would confirm more direct gains…

Good trading
Ian Copsey

A coming together…

In some ways it was a strange day yesterday. EURUSD extended losses while GBPUSD launched another rally. Another important development was the 0.9937 high in USDCHF – something I have been mentioning in the reports as a possible important target. Altogether, this is seeing a morphing of the current structures into the higher degree. So does that mean a sudden rush into impulsive moves? Not really at this stage, I think. Particularly in the Europeans there will still be some caution as we go into the Brexit referendum that should present itself in corrective structures. Therefore, we’re not going to break free of the recent (and even long term) consolidation. The time will come when a strong move is going to be seen… just don’t expect it too soon.

Thus, we’re more likely to retain the cautious trading style that has held us in its grips for far too long.

The Aussie has been pushing the downside and while there is no absolute confirmation of follow-through on the downside, the state of momentum does suggest the potential for losses to resume. There will come a time when we’ll see a deeper push higher – but I tend to feel that won’t happen today…

The JPY pairs were relatively tame yesterday, particularly in EURJPY. That USDJPY reversed to the upside was a bit of a pain but I’m not really too much in favour of robust gains at this point. Equally, the Cross still has downside potential – but could reverse higher at any point. I tend to feel that we’ll continue to see limited movement in both JPY pairs – but I am expecting a sharper move before too long…

Today should likely be yet another cautious day…

Good trading
Ian Copsey  




Tuesday, May 24, 2016

No change to the status quo

I had hoped, so much, that we’d begin to see a break of the mini-range trading. It almost looked as if it would happen but then collapsed in what looks to be a recycling. The 4-hour Price Equilibrium Clouds – the fine line between bullish & bearish – were the culprits but there surely can’t be another day of this range trading… The Continental Europeans must have been drugged to the hilt considering there were really hardly any barriers to either side to the market. Today should see this range break. At the same time, GBPUSD which I had really looked for gains, fumbled and gave up to tumble even lower – although remained above important (but extreme) support.

This should be a day for the Europeans to make a stronger effort to break away from the current impasse by choosing to develop a gap from the 4-hour Clouds that are moving sideways. Well, GBPUSD is an exception but it wouldn’t take much to push it one way or the other…

Even the Aussie failed. Well, it was very much on the lines of the Europeans: lacklustre and lacking in any form of enthusiasm. It too, is grappling with a lateral move in its own 4-hour Cloud. I still feel the upside is the more likely direction but just wait for confirmation…

As for USDJPY… arrgghh... what a mess. Fooled by a more than mini-minor correction in the final legs up to 110.58, the channel support broke and has seen losses. There should be more - but this is going to be a tough outlook. If there is any possible guidance it should come from EURJPY – that has also caused some whipsaws – so we’re going to have to watch the influence of EURUSD in this mix. The cross has been a complete pain in the ass-ociation but I can’t help feel that a stronger break is needed and EURJPY doesn’t really have much space on the downside – while USDJPY appears to be edging lower. So there’s quite a lot of onus on EURUSD to drag the cross higher… if it can…

Good trading
Ian Copsey  
  



Monday, May 23, 2016

DAILY OUTLOOK FOR GBPUSD

INTRADAY CHART
BIAS:       There's still support at 1.4464-85 (max 1.4441) to allow gains to resume…


Resistance: 1.4522 1.4550-60 1.4590 1.4612
Support: 1.4485 1.4464 1.4441 1.4420-25

MAIN ANALYSIS:      I was disappointed with the deeper pullback to 1.4485 - that's a 66.7% retracement in this position and the 76.4% is at 1.4464. (85.4% at 1.4441… but not expected.) The other concern is that price dipped below the 4-hour Cloud. Therefore, this does still need confirmation of gains but currently there are no hourly bullish reversal indications - but the 30-min chart is showing a bullish divergence. Hence, care is required now. To become more confident of the upside we need a break above 1.4550-60 at least  and also 1.4590. If this is seen, then look for gains towards the 1.4663 high...

COUNTER ANALYSIS:     Below 1.4440 would risk further losses back to 1.4403 at least - below will suggest an attack on the 1.4332 low…

Good trading
Ian Copsey

Reversion to correlation?

For the past few days we have seen a rather tense approach to a break level that could reverse the fortunes of the Dollar. Friday’s sideways moves in EURUSD and USDCHF basically provided a fragile consolidation that has led to the 4-hour Price Equilibrium Clouds to flatten out. This prompted a deeper decline than I had hoped for in GBPUSD but hasn’t breached any key supports – except the 4-hour Price Equilibrium Cloud – but ended up supported by the daily Cloud.

Today should be quite an important day in that case and should show us which way the market wants to move… or perhaps it will continue the narrow sideways consolidation… I hope not… Therefore, we must be watching for the first moves today. That may well only begin in the European session, but we shall get a sense of what’s happening then.

It seems as if USDJPY has still not yet formed a high and we’re likely to see further gains. This tends to suggest that EURJPY may also begin to make upward headway but could be bolstered more by EURUSD – although this still needs to be confirmed.

The Aussie performed adequately, is still in a fragile position, like the Europeans, with it struggling to break above the 4-hour Price Equilibrium Clouds but failing. However, I do feel it needs to press higher still but then tend to oscillate around the Clouds – probably a little below last week’s low. Thus, there is a limited range and probably slow trading that will be best to avoid. Instead, wait for the outcome.

Hopefully, we’ll see stronger movement later in the day…

Have a profitable week

Ian Copsey