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  


Tuesday, August 26, 2014

DAILY FORECAST FOR GBPUSD

INTRADAY CHART
BIAS: This appears still to be in a correction higher - take care with the potential for complicated structures

Resistance: 1.6575-80 1.6597 1.6620-25 1.6650
Support: 1.6560-65 1.6535 1.6520 1.6498

MAIN ANALYSIS: Instead of a minor new low we saw a choppy rally to the to of the 1.6565 - 1.6600 area from where we have seen a correction back to 1.6565. This may have done enough for a correction although the 4-hour Price Equilibrium Cloud is still providing resistance. Thus, any break below 1.6560 would extend losses and may then retest the 1.6535 low. I still have a cautious preference for gains to the 1.6625-50 area but ensure we see a decent reversal indication. A move above 1.6597 would then take price to that 1.6620-50 area and also allow for 1.6670-78.

COUNTER ANALYSIS: A break below 1.6535 would risk losses to 1.6511 at least  - any breach would see losses extend to 1.6480 and later to the 1.6465 daily low… Below would suggest follow-through to the 1.6392 daily retracement support.

MEDIUM TERM ANALYSIS:
20th August: With the development in EURUSD I am more encouraged by the corrective bearish structure that should probe the lower areas of the daily correction. The minimum is at 1.6495 but I suspect the 1.6392 area minimum and could be lower... However, before reaching that target area we are probably due a modest correction higher.

26th August: I am wary due to the vague correction and continued requirement for losses. I would suggest waiting for a break of yesterday's low at least and preferably 1.6498-11. Until then there is risk of the current correction continuing. 

Good trading
Ian Copsey

Sitting on a knife edge

The Dollar survived the upward challenge by the sharp end of the blade but barely saw much of a reversal in EURUSD and hardly more than that in USDCHF and GBPUSD. Yesterday’s gaps continue to provide a black hole, within which, the wave development has been zapped into an invisible vapour. While yesterday’s Dollar highs were all valid projection targets, the lack of fractals to really tell us what is happening therefore had the potential to proceed in any way that it wants.

Thus, we’re back in the same position as a couple of weeks ago, the 4-hour Price Equilibrium Clouds providing Dollar support and still some way away from key swing lows that could suggest a deeper correction. It promises potential to generate yet another day of consolidation unless the Dollar just extends its gains. From this perspective we’ll have to remain patient until either yesterday’s Dollar highs – or the 4-hour Price Equilibrium Clouds are broken…

AUDUSD spent the day revisiting the prior 0.9322 corrective high in a flat correction. It has recently been testing out the daily Price Equilibrium Cloud but failing each time. This could suggest the downside is imminent or a break above Friday’s high will turn this back higher.

Meanwhile, USDJPY failed to reach my target but appears to have had a far more complicated structure than I had thought, again yesterday’s gap higher making the process like reading a book in the dark. All this implies that we still need to reach the target areas I have been providing and hopefully this should develop today. Quite what this means for EURJPY is less certain. The triangle I had tentatively identified broke down to see deeper losses, but within the confines of a correction. This brings the prospect of the balance between EURUSD and USDJPY… Until there are clearer outcomes in both pairs I’d prefer to wait for confirmations in order to determine the fare of the cross…

Good trading
Ian Copsey  


Monday, August 25, 2014

Gaps on open suggest care

I was quite happy with the way things developed on Friday, the Dollar making further gains to the general minimum targets and I felt quite comfortable as I went through the analysis over the weekend. As I looked at the prices in early (pre-retail broker) trading I see the significant gaps that have occurred with current price really pushing the limits of intermediate targets. Of course, these gaps are going to make life difficult, both in terms of identifying waves but also the skew in the indicators.

If there is any means of judging whether we’re seeing the end of the current leg higher in the Dollar, it has to be the normal extreme projections. So basically the approach will have to be to note these extremes and the reaction at this point. If the extreme projections get wiped away then we have to look for the upside to continue. Otherwise the correction I had suggested was close on Friday can still occur. This basically covers the Europeans and USDJPY.

The Aussie deepened its recovery. I can’t say I was particularly happy with that although it still remained with a rather extreme final leg itself. This should allow the downside to develop with the targets I’ve been suggesting for some while, still very much on track.

USDJPY developed perfectly with the correction we saw. The gap higher this morning is also on target. There’s still more to go but not without a correction. This places EURJPY in a puzzling position, mainly due to EURUSD and the outcome of the statements above – whether it extends losses directly or corrects. I do feel the cross has further upside but the question is whether it consolidates for a while or extends gains directly…

Take care at the start of the day and take note of where the Dollar resistances lie.

Have a profitable week
Ian Copsey