Wednesday, September 3, 2014

We’ve got to the tricky part…

Slow, slow… quick, quick… slow. The market danced a Foxtrot yesterday only with one leg progressing slowly and the other taking a 100 metre sprint. The margins between a correct wave structure and an incorrect appear to be very slim but what does strike me is that, whether we see new extremes or not, the risk does appear for some sharper reactions very soon. It’s the fine lines between bullish and bearish – or in other cases bearish and bullish – is where the risk lies. This will take some managing.

The Continental Europeans extended Dollar gains as expected but area approaching some resistance areas – or perhaps already have. These have a fine-line between making one more Dollar high and correcting lower. Thus watch for the key break levels beyond which stops should be placed. In both, the 4-hour Price Equilibrium Clouds are flattening out and thus take care.

If the Continentals played through in a gentleman-like manner, GBPUSD very quickly surrendered to the declining daily Price Equilibrium Cloud which hit the Pound with a huge cricket bat to send it way outside the boundaries. It has moved so fast with precious few deep corrections that it will imply a sharper reversal at some point. The problem is being certain of the structure, which given the mini-minor corrections, is a delicate task to perform.

And if to make a statement of solidarity within the British Commonwealth, the Aussie followed suit (or was it vice versa?) This too, seems to require a correction but here the depth is a little less certain but in the larger picture, the break below 0.9300 was rather damning…

Even USDJPY made a mad-cap rally that hit my lower target… then the higher target, shimmied, pretended to correct and then extended gains. I had been expecting a shallow correction but this one seems to have been the most shallow for the position I have ever seen. Having said that, it didn’t break any rules. Thus, cautiously, the upside still seems to be in favour and could maintain the rally in EURJPY – an event I had considered 2-3 weeks ago, but then began to think I was wrong. However, a correction is due but could be relatively minor. Momentum conditions remain firm.

Good trading
Ian Copsey  


Tuesday, September 2, 2014

DAILY FORECAST FOR USDCHF

INTRADAY CHART
BIAS: Still look for the 0.9200-15 area to cap for a correction lower

Resistance: 0.9202 0.9216 0.9228 0.9243
Support: 0.9188 0.9176 0.9161 0.9140-50

MAIN ANALYSIS: The rally extended above 0.9160-71 to reach 0.9190-95. We should now see 0.9180-88 support for follow-through to reach the 0.9202 area at least - allow for 0.9216-20 though I doubt it will get this high. As this is approached note momentum conditions, preferably with an hourly bearish divergence - A 4-hour divergence is already in place. 

COUNTER ANALYSIS: Only above 0.9216 would extend gains to 0.9228 and possibly 0.9243.

Only a break back below 0.9176 would imply more direct losses, I feel quite choppy and relatively deep. Note the 0.9140-50 support.

MEDIUM TERM ANALYSIS:
21st August:   The break above 0.9114 is bullish. I still have only tentative intermediate targets but suspect we should see gains towards the 0.9400 area initially while higher targets are at 0.9480 and 0.9537... and probably the higher at a minimum. This will need to be fine tuned as it progresses.

Only an earlier break below 0.0.9022 would bring us back into a broad range, noting the 0.8950 support.

Good trading
Ian Copsey

More steady, but limited movement

Friday’s development didn’t go wrong, it just went as expected - but more slowly than I had hoped. So, the expectation of an interesting end to the week has become an interesting mid-week. The Dollar has continued to make steady gains all round with the exception of GBPUSD. Today should see follow-through with further gains expected albeit still at quite a slumbering pace – and of course, with Asia providing the deep sleep in between the rally.

It is noticeable that the 4-hour Price Equilibrium Clouds remain supporting the Dollar with more swings around the hourly Clouds that tends to point to either a temporary stalling point until the 4-hour Clouds hustle price in the same direction or yield to a break in the opposite direction. This mere observation tends to suggest another somnambulistic day.

The Aussie has been choppy in its decline – which is not too much of a surprise because it’s correcting a move from an earlier mini-correction. The outlook remains the same but does point to a more volatile outcome a little further down the road – and one that should be accompanied by the Europeans. The target support remains valid.

I had begun to get a little edgy with USDJPY, thinking that perhaps there was a mild risk of a minor new low but Friday saw that concern laid to rest with the steady gains it has made. This is very much in line with my preference and is helping EURJPY to remain afloat also while EURUSD drifts lower in a haze. I suspect this process will continue over today although we are quite close to some intermediate targets.

In summary: another generally slow but directional day with limited ranges.

Have a profitable week
Ian Copsey  



Friday, August 29, 2014

It should be an interesting end to the week

It was a steady, if unremarkable day yesterday, but that was expected. Despite the lack of any startling moves, what did happen provided some greater insight to an outcome for which I have been searching. This looks like developing over today although depends on whether the market is lacklustre or illustrious. The first part of the day should see the customary corrective price action that is synonymous with Asian trading but begin to step up some tempo into European trading through North American. The risk in EURUSD and USDCHF will be that with the long U.S. weekend we may find either a degree of reluctance to extend positions over the 3-days that could see either interest fizzling away or a sudden liquidation of positions.

The key to knowing which will occur will be knowledge of the next target area.

In GBPUSD we have a less defined outcome but the manner of its recovery yesterday looks positive for now. It is still subject to complications and the occasional consolidation, but overall it does seem to have a sense of stability that hasn’t been seen for some while. Today should be overall positive I think.

While frustrated with AUDUSD for the past week or so, yesterday’s high at 0.9373 was dead on the money. That it matched the previous 0.9373 high may, or may not, have relevance (because it was a projection target) but this should see risk of a move back lower at this stage.

The JPY pairs… well, I’m not too surprised with USDJPY but feel it needs to begin rallying now – the 103.49 low being the key make or break point. In EURJPY the decline stalled perfectly at the bottom of the target range. I feel it needs another leg lower but not before a deeper correction so the balance between USDJPY and EURUSD is going to be critical…

Have a great long weekend
Ian Copsey  


Thursday, August 28, 2014

DAILY FORECAST FOR EURJPY

INTRADAY CHART
BIAS: Look for losses to 136.70-74 for a correction and later to 136.40-51

Resistance: 137.11 137.29-41 137.66-70 138.00
Support: 136.89-93 136.70-74 136.40-51 136.13

MAIN ANALYSIS: The break below 136.95 has implied losses. Currently we are seeing a move down to 136.89-93 and then 136.70-74. This should provoke a correction holding below 137.00-11 from where another leg lower to 136.40-51 should be seen. This low should provoke a deeper correction higher - to the 137.29 high at least.

COUNTER ANALYSIS: A break below 136.30 would risk follow-through to 135.13 minimum and probably 135.88. Also note support at 135.50-60 - also at 13.4.94-18.

MEDIUM TERM ANALYSIS:
27th August:  I am finding the balance between USDJPY and EURUSD rather uneven. I am bullish USDJPY but bearish EURUSD so it depends on the relative performance of each. The clear break is below 136.90 which would suggest we have seen an expanded flat Wave iv and maintain the downside to 135.75-00 initially - and later to the 134.94-18 area  at least. Also note the 134.30 projection.
If price can hold above 136.90-98 then the original bullish outlook is still possible. We'll need a break above 138.01 to encourage a move through 138.30-43 and to 138.62-80 at least. The highest this could get is probably 139.60.

Good trading
Ian Copsey

Choppy development continues

There weren’t too many surprises yesterday although not every currency developed precisely, just close. Even that doesn’t surprise because in the part of the sequence we are in has several close projection targets and also retracement areas that are approximate. I think this is likely to continue today and probably through tomorrow. Actually, given Monday is a U.S. bank holiday it’ll mean that we’ll probably see limited movement each day until then. That doesn’t mean that we’ll stay in a range. Indeed, I think the current development should continue but within the boundaries of these sections that are towards the end of a sequence.

EURUSD is working its way quite well. USDCHF has some issues which confuse so I’d suggest taking care there, while GBPUSD is now sitting in a place where it can do a couple of things. Today should provide some information about whether we see new lows … or not…

I had taken a step back with AUDUSD yesterday, the rally having been too strong to retain a bearish outlook. I had been considering an alternative bullish option for some while. I’m still not 100% comfortable but for now the upside does look resurgent although it looks like suffering a similar fate to the Europeans – a good deal of choppy trading – so don’t expect a clear run at the target.

Finally come the JPY pairs. USDJPY has attempted to push higher yet again, but … yet again… it failed. There are two options here now – either continued range trading for another day or so or a new corrective low before it rallies. The upside targets remain… Where does this leave EURJPY? Well, yesterday’s losses do not seem complete and from what I see of both USDJPY and EURUSD it may well need both to dip further to reach the downside targets. Thus, take care until EURUSD has met its target and allowed EURJPY to meet its own also…

Today could be similar to yesterday…

Good trading
Ian Copsey  


Wednesday, August 27, 2014

Dollar grinding higher

Last week the strength of the Dollar began to show signs of getting its skates on. This week, apart from the gap higher in the Dollar, it has begun to feel ashamed of moving more than a few pips a day. Ok, I exaggerate just a tiny little bit but the way it has slowed down makes my shoulders drop. In some ways it can help the analysis because much of the support & resistance remains stable but the other side of the story is the introspective development in the lower degrees that tend to become much more erratic. This complicates the process. The persistence of shallow corrections also causes some surprises.

Still, despite that, yesterday did provide more information that maintains the current development. The bigger issue is how the three Europeans develop in terms of maintaining their basic correlation. Therefore, overall we can expect further gains in the Dollar, the pace of which is hard to judge although the general intermediate and final targets are relatively clear.

In terms of GBPUSD, the decline from the 1.7190 high has been pretty direct – but as mentioned above – in an erratic manner in the lower degrees with corrections uniformly shallow. At this point it has a couple of support areas that could maintain the potential for a deeper correction higher but this isn’t, by any means, a definite outcome. I would like to keep this chappie on its own leash and with its own plan of action. However, overall still bearish.

AUDUSD has recently been the provider of surprises and it did so again yesterday. It has put me in a neutral zone for the moment with several thoughts zapping around my mind. Again, the preference has been bearish but the market just hasn’t been able to sustain this expectation. I think we need a stronger indication here.

Finally, the JPY pairs: USDJPY did make a minor new corrective low, above the key break level, has made some progress higher and this basic outlook should continue. The slippage we saw yesterday, along with EURUSD, has put the key support in EURJPY under pressure. I have realised an alternative but still I’d prefer to see that break confirmed first. Even then I’m not sure we’ll see much movement today with both USDJPY and EURUSD not looking particularly frisky. It could be a frustrating day…

Good trading
Ian Copsey