Monday, July 28, 2014

DAILY FORECAST FOR EURUSD

INTRADAY CHART
BIAS: Take care between 1.3373-1.3400…

Resistance: 1.3444-48 1.3455-60 1.3484-95 1.3512
Support: 1.3421 1.3400 1.3373 1.3345-50

MAIN ANALYSIS: Already we have a solid 4-hour bullish divergence along with daily. Price has reached the higher 1.3422 target but a bullish divergence is not present as yet. Thus, from this point we need take care. The next (favoured) target is at 1.3397-00. There is a third at 1.3373. Thus, much depends on how this last leg lower develops and with hourly momentum pointing lower it would be helpful if the first part of the day saw some sideways drifting/consolidation before heading down to the 1.3400 area. Still allow for 1.3373.

COUNTER ANALYSIS: A direct break below 1.3370 will risk losses to the 1.3325-50 area - but not below 1.3295.

A direct beak above 1.3450 would suggest a low is in place to extend gains to 1.3484-95 initially. Above there should take us back to just under 1.3548. In turn that will need to break to reach the 1.3570-90 area.

MEDIUM TERM ANALYSIS:
25th July: Yesterday's direct losses now suggest targets between 1.3422-32 minimum and note the 1.3398 and 1.3373 projection targets. We must see an hourly bullish divergence to join the daily and 4-hour. With this low in place we should see a modest correction higher - though the depth is going to be difficult to judge.

A direct break below 1.3370 will risk losses to the 1.3325-50 area - but not below 1.3295.

Good trading
Ian Copsey

Still some work to be done

I’m finding this deathly, dull and slow development quite frustrating. It’s like being a kid waiting for Christmas but the days and hours and minutes all seem to get longer exponentially so that it feels like the day will never come. Dare I say that it’s getting closer – could be reached very soon, but there’s always the chance you could be dreaming and wake up having seen yet another correction and thus have to wait for a while longer…

I do think we’re going to see some greater swings, perhaps not directly, but the evidence appears to be building for the Dollar to reverse back lower, particularly in the Continental Europeans and USDJPY. Apart from Harmonic Elliott Wave there are other supporting indications with Dollar bearish divergences in the 4-hour chart, potentially in the daily charts. It has been hourly momentum that has been the thorn in the side, providing false promises of Dollar bearish divergences, then turning on a Euro/Franc and gloating with a “nyah, nyah – tricked you!” I don’t think this is going to happen immediately but with the 4-hour Price Equilibrium Clouds beginning to flatten out just above/below price (EUR/CHF respectively) the potential is there.

The Aussie reached its downside target but I’m not totally convinced that we’re seen the low. It could be a tricky day and even if we get a correction higher this pair has the ability to see either very shallow or very deep corrections in this position. At this stage of the structure it will be better to reduce position size, even square out and wait for the next move…

The JPY pairs behaved appropriately… USDJPY is now pushing the upside limits and has the potential to make this a long, drawn out affair that could look like a consolidation but with an upward bias. I don’t think we should be looking for massive gains and more to looking for reasons why it could reverse lower. From this, and the comments on EURUSD, the outcome for EURJPY seems doomed to stay in a tight range. What will decide the next direction will be the comparative reactions in EURUSD and USDJPY as they reach their targets…

Have a profitable week
Ian Copsey  


Friday, July 25, 2014

Untying the noose

Early this week I thought the Dollar bearish divergences, both hourly & 4-hour, would provide an opportunity for a reversal. Sustained Dollar gains, in EURUSD and USDCHF at least, broke the hourly divergences, held a knife at the throat of the 4-hour divergences but they have survived by the skin of their…err, neck. Still, however, hourly momentum for these two remains somewhat suspect. Through all this I have attempted to sustain a logical price indication through HEW which has basically succeeded in USDCHF (slightly higher than I had originally expected), but the structure in EURUSD required extensive renovations in the decline from 1.3650. I can see potential for a Dollar top but hourly momentum still has its own work to do.

What does make me somewhat cautious is the break of support in GBPUSD. Yes, I am bearish but had thought we’d get just a little more correlation with EURUSD. Perhaps there can be today although I can’t see the reactions being equal. Potentially this can develop later on but for now it seems as if the correlation will be erratic and brief. Later I feel they can be brought together over the coming weeks.

AUDUSD topped out exactly in the topping area I suggested. (see http://harmonicelliottwave.blogspot.jp/2014/07/daily-forecast-for-audusd_22.html) I can’t see significant follow-through lower today and more likely a correction higher. This is still in the foundation stage so don’t expect strong moves at this point.

The upside progress in USDJPY has been developing well and should soon see its intermediate target today. Overall this remains on course for the target area I have been suggesting. (see: http://harmonicelliottwave.blogspot.jp/2014/07/daily-forecast-for-usdjpy.html). As a consequence, despite the marginal new low yesterday, EURJPY has begun its own recovery. There is still some risk of confusion with the on-off Dollar correlation between EURUSD and USDJPY but overall there does still remain some upside. I just get the sense it’ll be quite choppy.

Still, we should see another relatively low-range day with two-way movement. Watch momentum and for potential targets…

Have a great weekend
Ian Copsey  


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