Thursday, September 29, 2016

Lack of energy

Dull, dreary and lethargic. On the whole, just about every currency remained within a tight range. The announcement by Opec appears to have provoked a reaction but, as of yet, not really with any venom. Only GBPUSD and AUDUSD have managed to poke their heads above the parapet and one wonders whether they’ll be shot down before too long.

So, overall we still need to wait for breaks of the limits of the ranges that have been set. Which side? Well, it does still seem to be Dollar bullish but this does make me wonder whether USDCHF can survive. This is the one conflict I have and I’m not sure how this structure will evolve.

The other pair that has been subdued longer than the others is USDJPY. It has a potential double bottom. I can’t imagine anyone will have missed that one but it hasn’t yet been triggered so there is still some vulnerability in this pair until we have a firmer resolution. It has been interesting to note that after Abe scared the market with his talk of inflation (which is already in place, by the way, but surreptitiously concealed in the supermarkets) the market hasn’t really pounded the downside… I wouldn’t even rule out a minor new low but I’m not yet convinced with a strongly bearish view below 98.89…

Basically, I think today will bring us a more directional move but it’ll take until the second half of the day.

Good trading
Ian Copsey  







Wednesday, September 28, 2016

DAILY OUTLOOK FOR AUDUSD

INTRADAY CHART
BIAS:     It seems we need a new high above 0.7695 but holding below 0.7725-55

Resistance: 0.7695 0.7725-32 0.7755 0.7777
Support: 0.7640-50 0.7605-15 0.7560-70 0.7535-40

MAIN ANALYSIS:    It seems we had a larger 5-wave rally from the 0.7556 low. The Wave iii was a 195% projection followed by a 42.5% retracement in Wave iv and thus we should see gains in Wave v. I am slightly wary of a complex correction in Wave iv - perhaps a triangle. Overall, we should be looking for bearish reversal indications from 0.7700 upwards...

COUNTER ANALYSIS:    Any earlier break below 0.7640 would trigger direct losses down to 0.7605-15 and more likely 0.7560-70. Take care as this may allow a mild pullback. Below 0.7550 would risk losses through 0.7535-40 and towards the 0.7525 low.

Good trading
Ian Copsey

Mostly discouraging

All was looking good by the time I sent out the reports yesterday. By the end of the day it had become a quagmire of alternatives. I had developed a logical outcome across the three Europeans based on their respective – and different – structures that could develop in correlation. This has become somewhat harder now. I have (and did have) an alternative for EURUSD but the correlation with the other two appears irrevocably damaged. Well, maybe GBPUSD could handle the change in EURUSD. As for USDCHF, it does raise question marks that mean we have to take tentative steps until either a new alternate structure develops, or just plain blows up.

At least, for today, I suspect they will have localised correlation for a while.

This even hit AUDUSD, breaking above 0.7674 to extend the upside. There may be a risk of a completely negative, sideways move in this pair. At least, it has the option. I have resolved the structure and this should just be a overlapping bullish structure but in its latter stages. So much depends on momentum – whether there will be any directional movement or just a sideways move – perhaps a complex correction.

As for USDJPY, it continues to stubbornly remain attached to an invisible rope tied around its neck but from below. It really is bugging me at the moment. There’s no real hourly bullish divergence but there is a long, elongated 4-hour bullish divergence but then, the recent moves are hardly in a strong trend. The descending channel drops by around 15 points a day and we have a potential double bottom now. However, I’d much rather this is confirmed in reality before any action is taken…

It was EURUSD that dragged down EURJPY and it now has to make up its mind. Will EURUSD carry it higher or the double bottom in USDJPY… or will it fade and drop listlessly below 112.07…?

Good trading
Ian Copsey  







Tuesday, September 27, 2016

Mostly encouraging

On the whole, with only two disappointments, I was very satisfied with yesterday’s action. The two detractors were EURUSD and USDJPY. I opted for a move lower in EURUSD that I thought would then need to reverse higher. It seems that it just decided to cut out the bearish detour and just take the easy road. For USDJPY, well I was caught by the horrendous mess in the rally from 100.09. Clearly I had misjudged that one and the depth of the decline stalled (so far) only 15 points above the 100.09 low.

As for the rest of the gang, the Swissie declined as expected. I had two alternatives, the first being a possible triangle and the other a more direct decline. Due to the wrong choice in EURUSD, it seems that CHF elected for a move down the 0.9659 low. In the meantime, GBPUSD did nothing wrong but still has a slight ambiguity – or more accurately - has two valid ways of completing this leg lower. There really isn’t much difference to be honest but don’t expect a whole lot of action in the Pound. However, between the Europeans, we should see some further Dollar bearish action today overall.

The Aussie performed perfectly yesterday, having caught the lows, reversal and highs. You can guess the outcome for today…

While USDJPY disappointed, somehow EURJPY managed a perfect recycling as I had been expecting. This should, theoretically, imply gains today that could come from both individual pairs. This appears to have a relatively identifiable target. The biggest risk is in USDJPY – so just make sure that it develops as expected…

We should see a steady day today.

Good trading
Ian Copsey  







Monday, September 26, 2016

Humps and bumps

The week ended with some surprises that I hadn’t anticipated. For the most part they appear to have been rather stretched waves that normally don’t occur – but can still be valid. Probably only one pair, GBPUSD, has taken an alternative route, one that I had commented on last week but felt that would likely not happen. Otherwise, Friday’s developments were rather gawky and clumsy valid structures. This tends to suggest that we need take care of potential short-term volatility today and perhaps into tomorrow as well.

This should, if I have read the market correctly, produce a slow start to the week and end with a bit more flourish. On second thoughts, the word “flourish” is a little too much considering the market appears so defensive. Perhaps I should suggest the description “confused and introverted” but frankly this has been the case for many months. That said I do see the potential, finally, of some stronger directional moves but this could still take a few weeks to develop.

Of note, the 4-hour Price Equilibrium Clouds provide some interesting positions. They capped the deep pullback in USDCHF with quite a sharp downward trajectory, similarly EURUSD but the positioning is slightly different and could generate swings around the Cloud. GBPUSD is also seeing whips around the 4-hour Cloud and the Aussie with an upward pointing Cloud that may risk a recovery in price as the week begins. On the other hand, USDJPY has poked its head above its 4-hour Cloud but only just.

I expect a relatively slow start to the week but later for a more constructive development. Take care today. Keep trades short in duration.

Good trading
Ian Copsey  





Friday, September 23, 2016

DAILY OUTLOOK FOR GBPUSD

INTRADAY CHART
BIAS:      I suspect a deeper pullback to 1.3036-47 at least - perhaps 1.2992-08 - for gains to resume


Resistance: 1.3098 1.3120 1.3148 1.3173
Support: 1.3065 1.3036-47 1.2992-08 1.2970-75

MAIN ANALYSIS:     Price rallied as expected - above 1.3064 and 1.3091 to stall just below the 1.3127. We should now see a pullback lower - but now a little deeper - to between 1.2992-1.3036. Watch for bearish reversal indications for gains to reach 1.3148 or 1.3173. Then expect a correction of between 50-75 points before the rally can push up to new highs.

COUNTER ANALYSIS:    Directly below 1.2985-90 would allow a revisit to the 1.2944 low. If this breaks then continue to look for losses that should test the 1.2865 low…

Good trading
Ian Copsey

Roundabouts and swings

The days when the Fed – and in this case, also the BOJ – make an announcement to show they that don’t know how to resolve the mess they’ve got themselves into, just while I’m going through the daily analysis, are always difficult times. Whips, hidden corrections (those that come in the tick charts and not even the 1-minute charts) create a lot of problems that take time to research before the deadline to release the report. Thankfully, for the most part, I identified the basic pattern of what should happen. The one I didn’t consider was EURJPY, mainly because of the bearish momentum in USDJPY. However, I realise now that I should have realised that the whole market appears to be in one mind in terms of structure.

So, apart from hidden waves in the tick charts that screwed up one or two projections, I was happy enough with yesterday’s outcome. Even then, there’s a slight imbalance between pairs that do not have the same structure, particularly in USDCHF and to a certain extent GBPUSD. This tends to suggest that we’re more likely to see fairly strong swings for a while but should compensate for the relative structures within the range of pairs. Some will breeze through the following moves while others will need deep Wave b/iii’s to match the extent of pullbacks to keep all pairs relatively correlated.

Therefore, I feel today is going go through a rather rocky day, maybe even with complex corrections, that will have the market being quite frustrating.

There is still some concern in USDJPY. It did recover but hardly with any robustness but has provided the basis for an impulsive move but still needs one or two developments to be able to feel more confident of the outcome I have been expecting for far too long…

Keep trades short in duration.

Good trading
Ian Copsey