Tuesday, October 21, 2014

WEEKLY OUTLOOK FOR SILVER

INTRADAY CHART
21st October:


The Wave x was more complicated that I has anticipated and looks like an expanded flat. This should now continue to see some choppy gains that should reach the 41.4% retracement at 18.38 minimum and could (and more likely to?) the 50% retracement at 18.73. This should complete the Wave -iv- from where we should see Wave -v- reach the daily (cyan) Wave iii.

Good trading
Ian Copsey

It ain’t over until it’s over…

Well, blimey crikey mate… the market didn’t ‘alf make a pig’s ear of trying to reverse… The day began well and I was thinking, “yep, that looks ok…” and was followed by “ok, I can take a recycling” and in the end it was “now that just isn’t working…” Certainly, it was very introverted trading and that clearly suggests the market isn’t quite ready to make a firmer stance or agree on a direction. Therefore, what this does now mean is that yesterday either saw a deep, deep correction in the lower degree or more likely we could be seeing a slightly deeper correction in the higher degree. Clue 1 for today is that Asia will almost certainly not rock the boat. That probably puts the odds in favour of marginal deeper Dollar losses.

To be honest, there’s a not a lot more I can add to the above except to say I still think last Wednesday’s Dollar lows in should still remain intact in the Continental Europeans (or perhaps suffer a minor breach) and that possibly USDJPY could make a new corrective high – probably EURJPY also.

This turn-around in the short-term fortunes has allowed GBPUSD to extend gains more directly than I had anticipated although the structure does suggest a slow development with a couple of modest corrections en route. Perhaps the anticipated high there could provide a signal for the rest. (Maybe it’s a case of Rule Britannia! Britannia rules the Harmonic Elliott Waves…)

As for the Aussie … it has moved slower than expected also and while I had hoped for losses to develop, nothing has gone wrong to suggest the downside is failing. Obviously, with the rest of the market exercising a high degree of uncertainty there are still some risks in the Antipodean but the downside still has the edge for now I think…

Another cagey day today by the look of things and if there is to be a firmer directional move it would appear to be later in the day rather than sooner…

Good trading
Ian Copsey  


Monday, October 20, 2014

Make or break

Clearly the market had little or no desire to end the week with a bang. However, there’s a growing chance that this week will provide a “pop” and potentially a “bang” although I see a broader tight range within which a lot of development needs to be seen. This tends to suggest deeper than normal corrections, possible even some complex. So it looks as if it could be difficult week. In particular, I still see a development mismatch between EURUSD and USDCHF that appears to require such choppy movement for both to maintain their independent structures without conflict.

I have noted that while EURUSD and USDCHF had a particularly range bound day on Friday that they both developed constructively and are also now pushing the Dollar upside limits of the 4-hour Price Equilibrium Clouds. They both now need a nudge to break cleanly away. This happens just as GBPUSD reached the upside target I suggested on Friday and requires a brief period of weakness. Interestingly though, is that GBPUSD looks more like it’s in a bullish sequence right now (although requiring a correction) so there appears to be a slight disconnect across the English Channel.

The Aussie also managed to poke a little higher and now it has to make a decision. It has been moving sideways and clinging lovingly to both the hourly and 4-hour Price Equilibrium Clouds. We now just need a decisive break to confirm the next direction.

The JPY pairs also developed as expected, both edging higher. There still seems upside available to USDJPY having broken above the 4-hour Price Equilibrium Cloud but does face a declining daily Cloud not too much higher. I would expect the daily Cloud, once approached, to be the more dominant force. This suggests a gradual upside process developing so the downside acceleration – or lack of – in EURUSD will have a determining impact on EURJPY. It does still have some upside available but is (not so) fast approaching resistance.

I suspect the Europeans and possibly the Aussie to be the better movers today but don’t bet on anything aggressive.

Have a profitable week
Ian Copsey  


Friday, October 17, 2014

DAILY FORECAST FOR EURJPY

INTRADAY CHART
BIAS: Care - this could be a choppy day but once it has topped out watch out for losses

Resistance: 136.41-47 136.87 137.24 137.70
Support: 135.81 135.50 135.09-24 134.48-72

MAIN ANALYSIS: Losses developed more directly back down to the 135.03 low and to just above the 134.01 area. This has caused me to re-assess the decline from the 141.22 high which appears to suggest that we could see deeper losses than originally (immediately) considered. Right now, I feel we are due a correction higher but the structure is a little unclear and could provoke losses from around the 136.41-47 area initially. At most the 135.09-24 area should support - and may not even reach that far. However, I feel there is a risk of another push higher to 136.87 minimum. We'll have to gauge the impact of EURUSD and allow for 137.24 or as high as 137.70. I feel the 136.87-137.24 area is probably about right. Thus, once EURUSD tops out we should see losses resume.

COUNTER ANALYSIS: On the way lower, when the drop starts, we need a break below 135.09 to see losses extend to 134.13 again - note 133.74 but I feel this will break easily and the larger structure suggests a lower intermediate target.

MEDIUM TERM ANALYSIS:
17th October:  Having worked through the structures from 141.22 I feel we are going to see quite a solid decline. This should see the 136.87-137.24 area cap (max 137.70) and for losses to then extend below 134.13 and to 133.00 minimum. This may just see the deeper projection at 132.27. This will need to be judged once the decline is under way.

Only back above 138.00 with either/both EURUSD and USDJPY breaking resistance would see a firmer move that would risk a firm rally back to the 141.22 high.

Good trading
Ian Copsey

Aftershocks receding

With the positions of the 4-hour Price Equilibrium Clouds containing the initial reactions after Wednesday’s seismic activity, it was pretty clear we’d not see a breakout from the range in the Continental Europeans at least. Even in USDJPY the 4-hour Cloud capped price. However, following the rather ragged nature of yesterday’s sideways moves there’s a stronger risk now of a break in one direction.

As a side note, I took a look at the Dollar Index which I normally analyse on Tuesday’s for the weekly report, and saw that it stalled 7 points below my retracement target. I had ruminated about the Europeans – not because they hadn’t stalled in the area I had anticipated but because of the lack of information from momentum. Thus, the observation in the Dollar Index has provided greater confidence. Even so, there is a slight disconnect in terms of the structures required to complete the moves in EURUSD and USDCHF – and on top of that GBPUSD appears to have its own agenda. Thus, the comfort of correlation doesn’t seem to be afforded at this moment…

Thus, I am expecting the Continentals to make further losses against the Dollar – though probably not in GBPUSD. The Aussie appears to be in the same boat as the Continental Europeans. We just have to manage the final corrective high.

So that leaves the JPY pairs. The fact that USDJPY poked its head above Wednesday’s recovery from the lows at 106.40 has taken away the array of options available and narrowed it down to just two alternatives – although they are pretty much the same. It would definitely suit USDJPY to extend gains but I can’t see this being particularly robust. Indeed, having reworked the losses from the 141.22 high in EURJPY I am beginning to see a larger daily structure beginning to take shape. It does seem to suggest a two-way day today but eventually ending up a little higher depending on the balance of USDJPY and EURUSD. Once this is complete we can expect some further losses…

There is a growing risk that we shall see stronger moves again today but just make sure that key levels are overcome to confirm…

Have a great weekend
Ian Copsey  



Thursday, October 16, 2014

Seismic activity

I live in Japan. I’m used to earthquakes and volcanic activity. Yesterday’s markets – both in Forex and equities – were far more scary… Having said that, Forex wasn’t too bad. It was only USDJPY that saw a sustained directional movement but that was implied on the break of 106.50 the level. The rally in EURUSD reached the target I set soon after the 1.2500 low. It was USDCHF that dipped further than expected but still within the boundaries of a correction. GBPUSD was whippy but remained above key support.

So all-in-all the Europeans appear to have behaved within their limits. Where the problem lies is more in confirming these Dollar lows. Normally I’d like to see divergences appear but there are none - so there is a need to approach the next move with care and to confirm a good impulsive development. However, this will require a neutral outlook until the foundation legs have developed. Until then there will be greater risk. The other problem I have is that EURUSD and GBPUSD appear to have conflicting implications. This needn’t necessarily be required but does raise concern because these two tend to see correlation more often than not.

The Aussie equally whipped around as if it had been... err… whipped. It could be part of a consolidation phase but there could be alternatives. Therefore, the first step should be to confirm whether the consolidation limits hold – and if not then we can work with breaks. This will mean a similar approach as with the Europeans in terms of requiring confirmation…

As for USDJPY… Once we’d seen that drop below 106.50 it was a dead giveaway. It does have further to go but whether it develops directly or decides that yesterday was too much of a shock and wants to hang around in a range – or even corrects higher – is something, like the others, needs some further development. That EURJPY remained steady in a relatively narrow range is interesting but also needs some more decisive catalyst. There could still be more downside in the cross but I’d sure prefer to see a slightly deeper correction higher at least…

It doesn’t look like an easy day today. Don’t push the boat unless there is a clear catalyst or breach of key support/resistance.

Good trading
Ian Copsey  


Wednesday, October 15, 2014

A waiting game

Tiresome. That seems to sum up yesterday’s trading. The market appears to have become bogged down in the drudgery of indecisive short-term consolidation patterns. There is still a little more to go but assuming that we see the type of trading witnessed yesterday there’s a good chance we can achieve a greater level of freedom. Even then, we have to bear in mind that this consolidation is still part of a larger corrective structure and that continues to highlight the risks associated with an uncertain market.

This should keep EURUSD and USDCHF held in a range through Europe and potentially into North American trading, while GBPUSD is a little less clear. The Pound has dropped to new lows although does appear to suggest a more corrective development that would imply a larger recycling. It’s difficult to contemplate the larger decline will develop since it hasn’t appeared to provide a firm enough starting wave. Thus, it’s going to be best to note where the line between bullish and bearish lies.

The Aussie has gone on a Walkabout, apparently aimlessly wandering around in the Outback and not really providing any solid information. It has therefore joined the general listlessness and needs to begin to form a more definite pattern/structure to be able to have a firmer view on the outlook. As mentioned yesterday, I still feel this is worth sitting out until a stronger structure can be identified.

As for the JPY pairs… well, USDJPY has remained on a slowing downward path but without any solid intent. It remains above crucial support but has clearly not made any key breaks with which we are able to take any advantage. However, the range for the break levels is getting tighter. The risk is that the 4-hour bullish divergence is being stretched and the hourly bullish divergence is not robust at this point. There is a suggestion from EURJPY that a recovery can be seen, with the aid of both 4-hour and hourly bullish divergences (although weak) but there’s a long way to go to confirm a reversal higher. Until then we remain in the same boat and have to sit tight and work on the short-term development.

Good trading
Ian Copsey