Friday, July 29, 2016

Barmy market

There’s a certain weirdness in this market. Back around 2 weeks ago I noted that GBPUSD needed to make a new high after an initial pullback. It came earlier than expected, triggered by the Fed’s interest rate announcement on Wednesday and which pushed the Dollar to the downside. EURUSD and USDCHF reacted with verve and intent. GBPUSD barely managed to generate any enthusiasm for the upside at all yesterday. @dumbstruck… It has an awful lot to do to catch up with their European buddies. It’s certainly going to need some due care and attention from this point.

Otherwise both the Europeans are performing really well. They’re going to need some deeper pullbacks at some point, so I’m not expecting a resolution today… but overall they seems to be settled in their respective structures – even if one is corrective and the other impulsive… That just leaves the Leavers having to make up their minds what they want to do…

Another surprise was the rather static move in USDJPY. This pair is sitting in a neutral zone that could provoke a move in either direction. I’ve been told that there’s a BOJ announcement – as far as I can see an interest rate decision – but we need to be on our guard because it should trigger a stronger move – whether up or down. Indeed, by the time I’ve written the report it’ll all be known… Naturally, that’s going to impact on EURJPY – also in a position that could break to either side. Clearly, it’s a case of following the break direction.

Meanwhile, the Aussie – in its inimitable way – looked at the chaos around it and decided to stay in a range. This was one of two scenarios I outlined yesterday but I can’t rule out the other. One way or another this will sort itself out either today or into Monday. Otherwise the underling outlook I have been suggesting remains in place…

Have a great weekend
Ian Copsey  

Thursday, July 28, 2016

One swing too many

The Fed broke the trend. Not that it was a great trend that required adjustments and deep corrections and weird and wonderful additional arms and legs on the sides. I gave a warning back on the 15th July that we’d need another rally in GBPUSD. Yesterday’s upside appears to have triggered that rally with the breakdown in EURUSD and USDCHF it seems we have a quorum… What’s more, this tends to side with USDJPY also…

Now, the problem I have is in scanning through the Dollar losses and trying to establish a reasonable structure and outlook. With yesterday’s description of the lower degree impulsive structures appearing to have qualities of a corrective phase, it make life far more difficult. We shall have to encompass other useful techniques that can guide us on the way.

If there are any detractors from the general Dollar bearish outlook, then it’s in AUDUSD and possibly EURJPY – even if it has no Dollar element. I suspect the Aussie may well opt to move sideways in a triangle or just consolidation – for a while. EURJPY has a lot more potential for corrective behaviour given the general correlation in the Dollar-currency pairs. Thus, best leave this pair aside and focus on the trending pairs…

Wile I had expected this to occur – even if it’s earlier than expected – the next high should spurn a better trending outcome…

Good trading
Ian Copsey  

Wednesday, July 27, 2016


BIAS:      While 115.60-96 caps we should see losses resume

Resistance: 115.60-96 116.15-20 116.40-60 116.86
Support: 114.90-00 114.45 114.05-10 113.80

MAIN ANALYSIS:     The expected losses reached the lower of the 114.45-114.85 support area from where a pullback higher has been seen. From there we have seen a modestly deep pullback but should hold below 115.60-96 (allow for 116.15-20) for losses to resume back to 114.45 and overall to the 113.37 projection (max 112.85.) This will require a pullback of around 120-150 points before losses resume... 

COUNTER ANALYSIS:    Any direct break above 116.30 and 116.72 would risk deeper gains. Clearly this will require either EURUSD or USDJPY (or both) to see robust gains. If seen then look for follow-through to 117.27-46…

Good trading
Ian Copsey

Too many swingers

The persistent deep pullbacks are frustrating and with the lower degree development tending to be too choppy or too direct, it generates difficulties in matching the right points that will clarify the structure. In the past I have associated it with more corrective development but for some while – certainly the past 15-16 months – this corrective style has infiltrated into the impulsive sequences also. It actually requires a method of automated scanning across the sequences to identify potential impulsive development – but I’m trying to work on that… Otherwise, the process of performing a scan manually can take an inordinate amount of time…

That said, the basic direction remains the same – although I have some doubts in GBPUSD that has a minor risk of having completed the downside. It’s difficult to consider given that the other Europeans and the Aussie are basically Dollar bullish even if they are moving like a roller coaster (translated into jet coaster for those in the U.S.) So, in particular, do take care with GBPUSD. We shall need a new low to confirm the original outlook.

The 4-hour Price Equilibrium Clouds tend to back up the Dollar directional bias but with the swings we are seeing it wouldn’t take much to see a swing in the opposite direction. Therefore, at this point I still tend to side with a bullish Dollar but there are fine lines between bullish & bearish at the moment. Therefore, do be vigilant.

USDJPY finally caved in. Until Monday we had a balance between complex corrections and zigzags. Yesterday changed that and now we’re looking for zigzags… The only problem is related to the first paragraph above… the lower degree structures and the limited pullbacks are making life difficult. I think we can work around the recent range to make that judgement.

It looks like yet another day that starts slow and ends with swings…

Good trading
Ian Copsey  

Tuesday, July 26, 2016

Limp and lackadaisical

Eeek, while the initial follow-through and reversal was seen in the majority of pairs, what then transpired was a lost market that didn’t know what to do, meandering but without any intent… It has seriously complicated the structures and has made life very difficult to be certain of the outcome. I sense, in some cases, the risk of a complex correction but which could become irregular. At the very worst, maybe it will break the basic Dollar bullish move that we have been seeing…

However, it’s not a done deal at the moment. Strangely enough USDCHF developed pretty much as expected although dipped 5 points below my ideal target. Even then, we now need to confirm the follow-through and this will be the critical issue today. The other pairs don’t quite have the same clarity as USDJPY so perhaps the Swissie can be the signal for the next move…

Even the Aussie appears to be developing an irregular corrective structure – most likely a triangle – but in this position it tends to suggest limited movement on both sides of the market. I could say much the same for EURJPY that has a pattern like a descending triangle but it’s one of those structures that can morph into an alternative irregular correction…

My underlying preference is Dollar bullish but best take additional care today… There’s not a lot of clarity in this market…

Good trading
Ian Copsey  

Monday, July 25, 2016


BIAS:     We remain in an uncertain outlook and may imply a sideways consolidation

Resistance: 106.40-50 106.75-85 107.25 107.49
Support: 105.77 105.40 105.26 105.90-95

MAIN ANALYSIS:   We have a range - from the 107.49 high to 105.40 low. The weekly Price Equilibrium Cloud is capping price while the daily Cloud is supporting. With the 3-wave decline there is a reasonable argument to suggest a complex correction - a flat or expanded flat. (A triangle is eliminated as this is a Wave [ii].) An expanded flat would have an upper barrier at 108.19-29 while the recycling could reach back to between 104.62 - 105.40. 

COUNTER ANALYSIS:   Thus, I doubt we'll see direct follow-through higher - above 108.30 - and only a direct break below 105.40 would suggest the potential for a second or even third ABC pattern lower. Therefore, be aware of the downside if 105.40 breaks directly. Until then, it's probably best to remain neutral to allow any complex correction to develop.

Good trading
Ian Copsey


The past week, while we’ve seen some swings, hasn’t really been too directional in the broad sense. Yes, it has an underlying Dollar bullish outlook but it can hardly be called a trend – unless we broaden the outlook to the daily chart. Even then, since the Brexit referendum, EURUSD has basically remained in a tight range while the losses in GBPUSD appear to have almost been a knee-jerk reaction. To be honest, I can’t see a firm daily trend developing any time soon…

So basically, we appear to have a hit and run and pullback… and sleep and snore outlook in the current overall picture.

As far as I can see, today looks like following through from Friday although, while I don’t expect any fireworks, because we’re coming to temporary intermediate barriers that will generate a correction, it’s down to the whimsy of the market to decide whether it will be brief or long. In the current semi-mid picture, all appears to be on track and if nothing else it is still constructive.

So it’s a case of patience and taking the low road, awaiting the high road, but the broad swings continuing if the current fashion of deep Wave (b)’s of Wave (iii)…

It should be a steady, if relatively limited move today…

Have a profitable week
Ian Copsey