Friday, August 28, 2015

DAILY FORECAST FOR GBPUSD

INTRADAY CHART
BIAS: We should see a pretty deep correction higher

Resistance: 1.5430 1.5450-55 1.5475-80 1.5508
Support: 1.5396 1.5369 1.5329-43 1.5290-95

MAIN ANALYSIS: We saw the correction back to the 1.5505-25 area - where it capped and saw losses as expected…but much deeper than I had anticipated… reaching 1.5369. This means we have to correct the decline from 1.5719 to yesterday's 1.5369 low. We now have a balance of the correction and just how strong the next decline will be. However, at a bare minimum will be a 50% retracement and that's at 1.5544-58 but which would need a strong Wave [iii] projection. The deeper 1.5602-36 area would make me more comfortable but could conflict with EUR and CHF. Hence the suggestion that we may see complex corrections in EUR and CHF while price here can correct lower - and then rally again. So, that's a broad outline to the possible scenarios.

COUNTER ANALYSIS: For now we should see gains and to the 1.5540- 60 area. En route, not the 1.5475-1.5508 area that should initially provide a barrier...

Only below 1.5365 would retest the 1.5329-43 lows… In turn, this will need to break to extend losses more directly.

MEDIUM TERM ANALYSIS:
27th August:  As suspected, the recovery from 1.5329 was corrective and yesterday's sharp losses have confirmed the downside. I would prefer to wait for a little more development to judge the intermediate targets but this should be quite low…

Good trading
Ian Copsey

Dollar losses likely

Yesterday’s break of the key 0.9551 high was a signal to see further Dollar gains. However, that indicated an alternative count in EURUSD that has found its target. Equally, GBPUSD initially performed well in the correction but which then provoked a stronger than expected follow-through. All in all this implies a correction today. That’s the easy decision. The more difficult part is working out how deep the correction will be…

It could well end up being a complicated task, because the “ideal” retracement levels in each, all seem to have diverging needs – most strongly in GBPUSD. This could even end up as a complex correction that would provide more scope in the individual corrective development to solve the requirements for each pair in the process. If my hunch is correct it will require a particular structure to form the basis of my theory… For today, it should just require Dollar losses…

AUDUSD also has a slight duality although this pair can plot its own course rather than pander to the Europeans. Even then, we need to understand where one scenario works and the other breaks.

After a slight uncertainty in USDJPY, the rally resumed and we should see further gains today. This tends to match with EURJPY but again - here we have a fine balance between the structures of the two individual pairs and the cross. It could turn out to be a scrappy and erratic day…

It doesn’t look like an exciting end to the week…

Have a great weekend
Ian Copsey  


Thursday, August 27, 2015

Still in the foundation stage

Yesterday saw the early correction in the Continental Europeans. There was never a set retracement level and it actually stalled just as the 4-hour Price Equilibrium Clouds began to flatten out to permit a reversal. Ideally, I would have liked a price pattern to develop – but alas there were none. As the day begins we’re facing a small conundrum. USDCHF has just touched a key resistance that provides a portal to the upside. It’s not quite so clear whether EURUSD has ended its current decline. Ideally it has and would therefore provide the suggestion of Dollar losses being seen. We’re going to have to work our way around this slightly uncertain structure…

Meanwhile, as EURUSD drifted lower GBPUSD decided to win the race for losses… As suggested, once the 1.5629 low broke there was no going back… However, it should soon see a correction higher. So even if GBPUSD has had a head start, the correlation between the three seems relatively good.

The Aussie broke support also to extend losses. It’s not quite the beat it was a few months ago, but more a steady step-by-step decline. Look out for the swings but overall the downside seems more likely.

USDJPY has taken its own route and rejected a deeper correction lower and has appears to opt for the upside. This should be a steady rally but with limitations. I suspect this will be a long-term sideways consolidation. As such, we’re likely to see a choppy outlook in EURJPY and for the moment bearish.

I also see the equity markets steadying themselves for a while... but only for a while. However, they are very likely going to witness some choppy development…

Have a profitable day
Ian Copsey  



Wednesday, August 26, 2015

Expecting a neutral day

In such early stages following the sharp Dollar losses the risk of the market going haywire in a reversal was always going to be low. I haven’t mentioned the Price Equilibrium Clouds recently but yesterday they did their job well. A classic reaction is a reversal higher in the Dollar, above the hourly Price Equilibrium Cloud only to run into still bearish 4-hour Cloud. This occurred in USDJPY, EURUSD and USDCHF. In particular, EURUSD stalled perfectly at the expected support area – another classic initial target on a reversal/retracement.

So, the straightforward part over and done with, we have a less clear outlook today. Commonly, if we are to see the Dollar rally again, we should expect a correction – one that could be a bit messy – and while that develops the 4-hour Price Equilibrium Cloud flattens out to allow passage for the Dollar to resume gains. The question is how deep will any correction be – or will the Dollar resume losses…

Such is the task we must resolve today…

GBPUSD made a grudging attempt to follow-through higher but clearly didn’t have the heart for a fight. It’s still sitting on the fence and from a structural point of view still has potential on both sides of the market. It’s now just a matter of break levels…

AUDUSD had a relatively quiet day, pausing to trade within a band of neutrality and therefore must make its choice of the next move. It could go either way although if I have any preference I’d go for the upside. However, it’s not a clear-cut outcome.

As for EURJPY… the early recovery it appears to have chosen a sideways consolidation with a band of downside room for it to explore. We’re already seen some losses so the problem that arises is how it copes with any corrections within corrections – something that can cause erratic behaviour – take care.

Have a profitable day
Ian Copsey  


Tuesday, August 25, 2015

DAILY FORECAST FOR USDJPY

INTRADAY CHART
BIAS: I suspect a down-up day but there are too many options for upside targets

Resistance: 118.70-75 118.95-00 119.46-62 120.50-55
Support: 118.15-24 117.83 117.26-42 116.94

MAIN ANALYSIS: Well, yesterday blew away the additional high above 125.85 and actually confirms the weekly outlook of a deep correction lower. After such a day as yesterday, it is going to be difficult to be precise. I suspect a potential triangle in development - or complex correction - but this does need to be confirmed. This suggests a correction lower - maybe to 116.94-117.26 - before rallying back above 119.46 and to 120.70 at least. It could even get a bit higher - noting the 121.15-25 resistance. Take care. 

COUNTER ANALYSIS: While not too useful - only below yesterday's low would extend losses although I think this is too early because the cycle low is in early December and therefore it suggests some periods of consolidation.

MEDIUM TERM ANALYSIS:
25th August:    The drop from the 125.85 high was pretty confusing and obviously fooled me. However, having seen yesterday's low it suggests that the 125.85 high was an intermediate daily/weekly high and this should see a period of sideways consolidation but with risk of losses at some point...

Good trading
Ian Copsey

A wild start to the week

I was prepared for some Dollar weakness but had not envisaged the degree of weakness that occurred. It does look to have clarified a few things although trying to follow such frenetic moves can be hazardous to wealth. In the end, I have found the levels we reached quite interesting.

For a start, the losses in USDJPY have triggered an outcome I had always expected but hadn’t thought that it would be direct. The next move may well be sideways but there are several options and until we have seen a little more development I cannot be certain of the subsequent alternatives. Where it should finally make its final move is already known within a range but there’s plenty of time before that outcome.

That USDJPY has dragged down EURJPY tends to follow-on from the caution I mentioned yesterday. I tend to see EURUSD and USDJPY relatively correlated and therefore it could end up as a sideways consolidation for a while.

Now, the Europeans… were… umm… interesting. The severe weakness in the Dollar took some time to analyse. USDCHF was pretty easy and, while slightly deeper than I had wanted, stalled almost perfectly at a deeper retracement. EURUSD – while I obviously not having anticipated yesterday’s high, it was a pretty interesting level. In fact, it was 50%. I am not exactly 100% certain of the internal structure because it was moving so quickly, but matched with USDCHF, these levels were very critical. However, the reversal indications haven’t been the best so we need to take this step by step.

Finally, and also quite interesting, was the resumption of losses in AUDUSD. I had mentioned in yesterday’s video outlook that the move to 0.7408 did provide the minimum requirement for the correction – but that it was a correction of only 2 bars in the daily chart made it difficult to believe that the correction had completed. Yesterday’s losses tend to confirm that we’re back on a strong Dollar outlook…

Remain cautious today – the market may need some time to adjust.

Have a profitable day
Ian Copsey  


Monday, August 24, 2015

Quite an end to the week

There I was on Friday morning, watching the completion of a 5-wave move in USDJPY, EURUSD and USDCHF, all accompanied by hourly (Dollar) bullish divergences and thought: “great, this should generate a correction” – and it did. USDJPY 14.6%, EURUSD 7% and USDCHF managed a massive 23.6%. So the quiet end to the week became a frenzy of imbibing uppers that extended the Dollar decline…

So what have we got as this week starts? Well, follow-through but I’m not sure it’s going to be a repeat of Friday. We are approaching important Dollar support - more a buffer area that should be challenged – and just how the market reacts is going to be important. Special attention should be made to momentum – particularly around the 1.1436 high in EURUSD and approaching 120.41 in USDJPY. In USDCHF this buffer area is less clear and as such it’ll be best to match momentum indications while approaching the levels mentioned above in EURUSD and USDJPY.

As for GBPUSD… well, what can I say? It has stopped even trying. The entire recovery from the 1.5329 low has been a complete mess and needs a catalyst. It’s probably still not time to make any decision about this chappie and better to wait for the outcome of the Continental Europeans and USDJPY.

The Aussie started off well but then caught a cold. It has made the outlook appear less certain and therefore needs more attention. It is currently in no-man’s land with potential on either side of the market but with the added risk of whipsaws. This needs further development to clarify the outcome.

That just leaves EURJPY that flattered to deceive. Considering the general correlation within the Dollar-currency pairs it’s difficult to judge the outcome. I have had me view but it's been coming up short. I’d rather treat this with caution also.

Have a profitable week
Ian Copsey