Monday, February 29, 2016

A relatively consistent outlook

Friday began relatively quietly but did warm up towards the end of the day with the Dollar regaining its strength. This has seen Dollar bullish breaks above the 4-hour Price Equilibrium Clouds although there are mixed indications from the daily Clouds. Observing momentum will be very helpful in determining the potential for multiple time frame readings in momentum.

Before getting too enthusiastic, I do note that there appears to be some early dissention between the pairs. The Continental Europeans do appear to be set for losses against the Dollar but GBPUSD and USDJPY are hinting of a slower start – both having momentum indications that suggest some minor Dollar bearish divergences. It would therefore be prudent to confirm the outlooks in both groups – Continental Europeans versus GBPUSD / USDJPY – just in case the market has trapped itself. The positive factor is that the Dollar Index has pushed back higher again and that should set the underlying trend. 

I am slightly mixed in EURJPY. It has managed to haul itself off from the floor but not by a significant margin. Hourly momentum hasn’t really proffered any bearish divergence but the 30-minute chart has. However, if my observations above in terms of the two Continental Europeans versus GBPUSD and USDJPY this would tend to suggest losses.

The Aussie is also in a particularly uncertain situation. It basically developed as expected – although the drop down to 0.7117 was a bit deeper than I normally seen for the outcome I suggested last week. However, there’s a fine line between bullish & bearish now… Watch that carefully.

Have a profitable week
Ian Copsey  

Friday, February 26, 2016

Quiet end to the week?

I’m not quite sure about yesterday’s moves. Nothing really went awry but we didn’t see the Dollar make gains universally. I suspect this will continue over the first half of today. For example, GBPUSD appears to be locked in a sideways range – and potentially AUDUSD also. EURUSD appeared to be frozen as if caught in the headlights of an on coming truck while USDCHF made some steady gains but then gave them back. It’s almost as if the market is a little disjointed.

Having said that, I do feel we shall see a directional break before long and most likely (as normal) either in European or U.S trading hours – or maybe both. I still think this is more biased to the Dollar upside but we’ll have to see how long the current status quo can hold.

Even the Aussie has some kinks in it – and enough to suggest the potential for a sideways consolidation. This isn’t the outcome I expected but there are a few options here and this should keep it in the recent range for the entire day. Play the ranges here.

As for USDJPY, it has made steady gains and while I expect these to continue there is also the risk of some initial consolidation. This tends to dovetail with EURJPY that took advantage of its Japanese big brother to make a decent recovery. However, with the expectation that EURUSD will decline, we shall need to watch the balance between the three pairs. While there can still be upside room for the cross there will be a point where the cross fades and begins to point lower…

I find the relationship within the range of currency pairs quite flexible to a degree but a clearer directional bias is likely to develop either by the end of today or on Monday…

Have a great weekend
Ian Copsey  

Thursday, February 25, 2016


BIAS:         We should see losses today but note the potential for a sideways consolidation


MAIN ANALYSIS:     We did see the second decline move down to 3 points below the 1.0960-65 target area. From there the pullback reached 1.1046 to complete a 3-wave recovery. This now has a slight ambiguity in that the 3-Wave recovery does raise the risk of a complex correction. Thus, we should see losses down to 1.0970-78 at least - this implying a triangle but the alternative could be a retest of 1.0957 (flat correction) or even 1.0923-36 being the limits of an expanded flat. If a flat/ expanded flat is seen, then we could see a recycling back to the 1.1046-52 area. 

COUNTER ANALYSIS:    A direct break below 1.0920 would imply follow-through lower that should eventually reach 1.0849-76 - but just for a correction.

Thus, we need to be observant, watch momentum and react to the alternatives…

Good trading
Ian Copsey

Dollar to turn back higher

For the most part the steady trading I had expected developed. There were a few strays but overall the main outlooks were standard for normal development. This appears to have completed the Dollar downside outlook, barring AUDUSD perhaps and therefore I suspect we’ll see the Dollar begin to return to the upside. While saying that we should see a bullish Dollar there is one risk that should be considered – that in EURUSD and USDCHF in particular, yesterday’s pullback developed in 3 waves and this could provide a sideways consolidation in a complex correction.

I feel by next week the chance of a more directional trending move is becoming stronger. This is also true of the indices. Before that trend develops there is risk of foundation waves being built – and/or a corrective structure that can lead us into the decent trade set up.

Of all, perhaps, USDJPY dipped to just 6 points above the 110.97 low. It isn’t quite out of the woods but with momentum supporting, also EURJPY, there should be a decent recovery. We’ll have to be patient in the first half of the day while price finds both pairs knocking at the 4-hour Price Equilibrium Clouds. By the end of the day there is a good chance of breach.

The Aussie performed well, holding at the support area I suggested and from this point I suggest caution. There is a fine line between bullish & bearish still and we’re going to need a level of due diligence in observing the structure and whether it points strongly higher… or not… The key pivotal area I pointed out yesterday remains the key to the next move…

A slow start – but by the second half of the day we should see some better movement…

Good trading
Ian Copsey  

Wednesday, February 24, 2016

Steady Eddie trading

Sometimes I get tired of waiting for the market to get in with trading. Recently it has been pretty boring and occasionally stagnant but there are signs of a more progressive development beginning to evolve. We should soon see global indices begin to wake up – not quite yet, but the signs are constructive. Likewise, the Dollar does appear to be creating the potential for a stronger directional move. It’s not going to happen today, probably not tomorrow either, but by next week there could be signs of the market hotting up. 

Today? Well, I suspect a modest move but probably more corrective and that is likely to retain a defensive outlook. This suggests a return into the recent consolidation zone and that should maintain the status quo for now. Therefore, there seems to be little risk of sharp moves today.

We have a long descending channel in USDJPY at this point. It wouldn’t surprise me that it could retain that channel for a day or two more. Needless to say, breech will trigger a firmer move. Overall, the 4-hour Price Equilibrium Clouds are courting price very closely and that tends to suggest a break can occur at any time. This is reflective of not just USDJPY but all three Europeans, the Aussie and EURJPY.

Thus, maintain a keen eye for the break levels that will take us back into the range today…

Good trading
Ian Copsey  

Tuesday, February 23, 2016

A turn up for the books…

A Wave (ii) correction of 22% rarely occurs. The outcome to this event is a surprisingly direct follow-through. These events are painful because it’s difficult to be prepared for a rare event… That scuppered my conservative outlook but does provide a general outlook for the Europeans. In some ways, it’s still early days. I can generate potential projection targets but at this point the range of applicable ratios are too many to be certain. This has the bump on effect of estimating where the intermediate lower degree waves may stall.

Nevertheless, the burst higher in the Dollar has seen it break above both the 4-hour and hourly Price Equilibrium Clouds – so a positive outcome – but while EURUSD has broken below its daily Price Equilibrium Cloud, it has not been replicated in USDCHF. GBPUSD is in a different position but still pointing lower.

Quite how AUDUSD managed to break above 0.7242 had me speechless. I can’t imagine it’s going to soar away higher but there does appear to be risk of further gains. There are probably two high risk outcomes with the difference being how deep it can continue higher. It has forced me to scramble to work this out but I’ve not quite sussed it out yet… Best leave alone for now and observe the next move…

USDJPY… failed to extend losses and actually pushed higher. It was the eventual outcome anyway but I would have preferred to have caught the low. The target remains the same. However, as much as USDJPY made gains, it was not enough to stop EURJPY extending losses. I suspect that general outcome will continue – as – most likely – EURGBP should also drift lower. In terms of USDJPY and EURJPY it’ll be best to hold off due to the risk of some erratic lower degree development at times. Best wait for that USDJPY target…

Good trading
Ian Copsey