Friday, April 29, 2016

Calming down…

The story of yesterday was the 1-point break above the prior 111.86 high and a walk off the cliff face. As it dropped it didn’t even have time to notice that there was a double top as the bungee rope uncoiled. However, we should have seen the current low – or maybe a minor breach – to allow the rest of the day to urge it gently higher. Of course, it’s the start of Golden Week – of which I have pleasant memories of a few days break – and therefore the market here should slow down over the next few days and probably a bit more. That EURJPY was obviously dragged down with USDJPY can hardly be a surprise with EURUSD expected to make upward headway, we are likely to see the cross recover along the way.

The Europeans have seen some choppy behaviour but I suspect a degree of acceleration – not too much – to maintain the Dollar downside as we go into the weekend and on Monday come out into May. These next 2-3 weeks are going to be interesting following the past year’s sideways daily consolidation. The signs are that in the equity markets also and I feel we’ll need to exercise some patience within the general market overall.

The Aussie’s sharp losses over the past couple of days have stalled as expected and should make upward headway but in a rather erratic manner. It’s probably best to just observe for now and wait for the right moment to re-enter the market. In corrections the Aussie can be brutal…

Steady but slow trading as we go into the weekend.

Good trading
Ian Copsey  

Thursday, April 28, 2016


BIAS:     From the shallow corrections it suggests that we are building up from a base to see stronger gains

Resistance: 1.4572-76 1.4590-95 1.4618 1.4638
Support: 1.4497-20 1.4472 1.4435-40 1.4402-15

MAIN ANALYSIS:    While the Fed provoked some mildly sharp moves here, overall the limited corrections appear to suggest that we are already on our way higher. If there are any initial deeper corrections I suspect they'll stall between 1.4497-20. Thus, the underlying outlook should be bullish and therefore watch for bullish reversal indications. A break back above 1.4576 should see gains that suggest a move back to the 1.4638 high and also 1.4667. Take care as I suspect this may well provoke a correction from this higher area.

COUNTER ANALYSIS:    Only a direct break below 1.4472 would risk losses but this would most likely be a correction still… Thus, continue to look for bullish reversal indications.

Good trading
Ian Copsey

Soporific Fed

I woke up this morning and turned on my charting and all hell had let loose. First I worked through the structures because they are more important than reading some boring economic piffle. Having waded through the analysis and generally feeling I have resolved all the sharp whips, I decided to have a look to see what had caused this mess. “The US Federal Reserve has kept interest rates between 0.25% and 0.5%, the rate it’s held since December.

Oh whoopydido… That was exciting wasn’t it? Seriously, what was all that kerfuffle for? In the Continental Europeans the only impact was a complex correction and has basically retained the expected outlook that I offered yesterday. Even the little blip after the big blip sorted itself out and actually has (what looks to be) a really strong structure with appropriate targets. The job now is to follow this through and confirm the intermediate levels are seen.

GBPUSD did give me a little more work to do. The correction from 1.4638 high has been so paltry that I have had to adjust back the count to one I had originally had, but with the follow-through I tried to keep it on track otherwise it would have seen a mini-minor correction. Well, it appears that the mini-minor correction was correct. Thus, we should have a generally correlated outlook for all three Europeans.

Of all, it was the Aussie that had me puzzling. Having dropped below my support following whatever announcement, that was made by whoever, it has changed the entire game plan. Nevertheless, today it should correlate with the Europeans today I feel but could be pretty choppy.

If the Fed announcement impacted on the Europeans, it appears to have had a dampening effect on the upside and tends to suggest a sideways consolidation. This should dampen the upside in EURJPY – but still make gains overall. Frankly, it is better to give the JPY pairs a wide berth today and allow them both to work through their independent structures until close to completion.

Good trading
Ian Copsey  

Wednesday, April 27, 2016

Puzzles and conflicts

Hmmm… I had my eye on minor new Dollar highs in the Continentals before the reversal – but yesterday saw direct losses… At the same time, USDJPY dipped down to 110.66 – 2 points above an ideal retracement support. The combination of strength in both EURUSD and USDJPY dragged EURJPY higher and to a target area I had been looking for. The conflict is that it would appear that both USDJPY and EURUSD are bullish which will drag the cross higher… and that’s something I hadn’t wanted. If there is any weakness in my count, then it’s more likely to be in USDJPY that has been a difficult structure to track. Therefore, watch out for this possible alternative.

When looking at the Continental Europeans it looks as if everything is on track. EURUSD did have a question mark over one part of the structure but USDCHF is quite clear. In the larger wave degrees, there is still some way to go but there are subtle differences in their individual structures but which tend to work through because of the relatively correlated ratios in the corrections. I think it’s going to be important today to be aware of how each pair is developing and whether they conflict with what’s happening within the underlying picture. If a conflict arises it will be better to remain square and wait for the structures to balance out again.

Within these conflicts I can see GBPUSD being contrary to the Continental Europeans. The Pound rallied to the higher projection targets but tends to suggest that we need a deeper pullback lower. That tends to be likely because EURGBP does require a relatively strong correction higher. Thus, the outcome from the recent rally does need losses to develop.

The Aussie made further gains but not quite enough to be certain of extending yesterday’s rally. At this point there are two options – clearly one bullish and one bearish – both can be valid but wait for confirmation.

So, it looks like a complicated day overall. Make sure that solid trade set ups develop…

Good trading
Ian Copsey  

Tuesday, April 26, 2016


26th April:

The break above 1.4513 came as a surprise and suggests further upside. However, we're close to the immediate Wave v that should stall between the 38.2% - 50% projection at 1.4539-63. Thus, in this general area watch for bearish reversal indications. This should see losses back to the span of the Wave b / v between 1.4320-60. Perhaps this will be the final corrective low but there's a strong possibility that when EURUSD reaches 1.1494 these two can reverse. 

Thus, there is quite a wide band within which the Wave (B) can stall and it will be important to watch for bullish reversal indications. This should provoke another 5-wave rally in Wave (C) that I feel will most likely form the final Wave (b). However, as this area is approached, watch for bearish reversal indications. 

Good trading
Ian Copsey

The long and winding road

… which so far hasn’t got us very far… Sometimes I wonder how the market can utilise empty space with such maddening, meaningless meandering, yet maintaining an underlying structure. However, yesterday’s backtracking has merely been met by the 4-hour Price Equilibrium Clouds in EURUSD and USDCHF that should maintain a barrier to allow the Dollar upside to resume – and no doubt very, very and err… very slowly…

That GBPUSD managed to break above 1.4513 has generated an alternative to the consolidation. Having said that, while there could be some further upside, I doubt it will be by much and over the coming week or so I suspect we’ll be back below today’s levels. Thus, we can remained assured that there will likely still be ratcheting swings for some while to come – I suspect for 2-4 weeks.

The Aussie looks pretty much the same. While it made minor new lows yesterday – and there’s even risk of further minor lows – the upside should resume but expect the broad swings continue for some while. What has been most painful is the slow development that has me falling asleep in front of the screen…

USDJPY hit targets yesterday. I can’t rule out further losses but there’s now a fine line between bullish and bearish. I note that EURJPY is at a point where it needs to follow-through higher else suffer relapse. This was the point I mentioned in yesterday’s report. Thus, watch the balance between EURUSD and USDJPY and be aware of the limits on both sides of the market. This could be a bit tricky unless a clear break is seen…

It looks like another slow day…

Good trading
Ian Copsey  

Monday, April 25, 2016

Hip-hop Swingers

The market decided not to bother with a deeper correction in the Europeans and just to follow-through. This should be the main theme for today but I doubt it will last for too long… unless the market goes into slow motion. These two look like reaching the targets I set around 2 weeks ago. This has generated a kinda swinging consolidation but still basically Dollar bearish when looking at the larger picture. What’s more, we’re probably going to see a repeat – to a certain extent but just shallower later on into May.

I worked through the analysis  in GBPUSD yesterday and, while initially surprised, I realised I had found what should have been a completed correction. The swings may well continue here but this morning’s break above 1.4458 has come as a surprise – and frankly doesn’t look logical. Having seen the structure break down I have provided an alternative but this needs to be ratified by the next break levels…  

The Aussie extended losses as expected. It can still see more of the downside but appears to have limited room for manoeuvre. Watch out for that…

As for USDJPY… well, following a largely steady swing higher over the past two weeks, someone pushed a stake up its backside that accelerated the recovery. This obviously dragged EURJPY along with it. There appears to be room for more of this but the weekend allowed the sore backside to take a rest and it suggests a slightly deeper pullback before making the next step. The balance between EURJPY, USDJPY and EURUSD is going to be fine dance but could provide us with some clues. Therefore, don’t expect an exact repeat of Friday…

Have a profitable week
Ian Copsey