Monday, October 31, 2016

Knee jerk

Friday turned out to be a complete surprise with the Dollar dropping sharply in the U.S. afternoon. It wasn’t what I was expecting but in some pairs the levels that were reached on Friday were areas I had been noting as extreme – particularly in EURUSD. In other pairs these knee jerk reactions required some adjustments but have not really altered the larger wave degree expectations. No doubt, the market is going to be cautious after such a reaction but my larger outlook remains constant. Indeed, this is reflected in the Dollar Index.

Therefore, I suspect Asia will react by not reacting and it’ll take until European open to see a more progressive development. Most likely this will begin with some initial foundation waves that will provide the basis for the follow-through. It could even mean that today may well be a pretty dour day – or at least, a limited daily range. Therefore, it’s more likely to be a day for scalping or just setting up a base for a longer trending move over the coming week.

Down under, the Aussie took its time in slipping lower but holding above the lower support areas I detailed. This should still see some upside but I’m not sure how deep this will be. The expected limited range trading in the Europeans may well allow the Antipodean to at least provide a modest recovery.

Finally, just moving on to EURJPY, I have been neutral for the past couple of days as I attempted to rationalise the structure – not only in recent development but actually required an adjustment from early August. I feel I have finally worked out what is happening – and quite a complicated development. Today’s trading will be a test of the analysis I went through yesterday but I feel a lot more confident of this now…

Have a profitable week
Ian Copsey  

Friday, October 28, 2016


BIAS:       We should focus more on the upside

Resistance: 0.7607 0.7627-35 0.7652-58 0.7670-77
Support: 0.7579 0.7550-63 0.7520-31 0.7506

MAIN ANALYSIS:    The break below 0.7625 clarified the 0.7708 high as the top. I can see a risk that we have already seen the low at 0.7579 but until the 0.7595 high is broken there remains a chance of a new low around 0.7550-63. (I also see a deeper projection at 0.7520-31 - but we'll need to judge this if it occurs. We have an hourly bullish divergence already. A break above 0.7595 would allow a pullback higher. The only issue with this is that we have an infinite range of retracements... However, given the overall Dollar bullish outlook, it would tend to suggest the 0.7627-58 area as a possible cap. Thus, take care and observe for bearish reversal indications. 

COUNTER ANALYSIS:    Any direct break below 0.7520 would see direct losses with the next stronger support at 0.7442…

Good trading 
Ian Copsey

Alternatives to develop?

It wasn’t the day I thought it would be yesterday. In particular, USDJPY sailed above the expansion level but does now suggest a couple of challenging barriers. Meanwhile, EURUSD and USDCHF managed to make progress in the Dollar upside – perhaps threatening to copy the lead set by USDJPY – but hasn’t quite done enough to actually confirm that they’ll follow the JPY lead. If there is any chance that the sideways consolidation I suggested yesterday is to happen then these two need to stumble and revert back into a negative, sideways development.

However, given that GBPUSD topped out perfectly and isn’t looking for a temporary hideout to escape a trending move, the risk for all three Europeans to perk up and follow the USDJPY lead. If there is any risk of a stumbling block in GBPUSD, then it should be temporary and certainly not in the larger degree that the Continentals would require.

Therefore, watch this group and the balance between them to identify the break levels.

In AUDUSD we saw the break below 0.7625 to confirm a trending move. It has reached below the 0.7587 low – although marginally – but doesn’t really need to promise to follow-through by a large margin. We have an hourly bullish divergence as price is hitting the bottom of the (sideways ranging) daily Price Equilibrium Cloud. I suspect we’ll see a pullback over the day.

As for EURJPY, the rally continued through the progress in USDJPY. Now that it’s coming to a set of barriers – and assuming EURUSD will extend losses (even if in a correction) the risk is for the cross to weaken over the day…

Have a great weekend
Ian Copsey  

Thursday, October 27, 2016


Three wave moves. They can be part of an impulsive development – or they can be part of a corrective structure. Let’s take yesterday’s development in USDJPY as an example. I suggested the 104.00-10 as a base for the day. This implied a 3-wave decline from 104.87. From that low we appear to be completing two sets of 3-wave moves to reach to around 104.66-67. This was the lower target I suggested could provide a triangle. This may well be the case but there can be a triple three that could retest the 104.87 high – and possibly a minor break above. Basically, this implies a corrective structure and indeed, a complex correction. Thus, we have the option of a triangle, flat or expanded flat.

Both EURUSD and USDCHF also saw the development of a 3-wave move. Conclusion? We ain’t going to get very far today in these three pairs… It’s going to be down to the three structures listed above… A boring day and perhaps one that could extend to the end of the week…

As I write, USDJPY has managed to reach 104.67…

Now, GBPUSD is different and a pair that gave me some grief. I have resolved this – I think at least – but it is also hitting a retracement high. Thus, while in a different structure to the other majors, there is a sense of correlation because the Dollar needs to rally in the other two pairs – EURUSD and USDCHF… Therefore, the basic directional expectations appear set.

But what about AUDUSD? Well known for its boomerangs, the early trading yesterday saw that boomerang whizz into the sky – approaching the 0.7734 high but stalled at 0.7708 to see the boomerang come back to almost where it began. This has a tricky outcome because the rally was so sharp there could be a snafu hiding. I wouldn’t be too surprised to see it reverse back higher – but keep a watch on your backside…

As for EURJPY – having held up my hands and washing them of a structure – I remain neutral for now. Everything looks pretty well correlated… Best allow the structure to reveal itself…

Good trading
Ian Copsey  

Wednesday, October 26, 2016


BIAS:        There could be a dip to 0.9910-20 for gains to resume - but could imply a complex correction


MAIN ANALYSIS:     It appears that the 0.9915 low was the end of the pullback and from there we saw a steady rise and then a sharp rally to the 0.9979-93 area - ending at 0.9998. As expected this provoked a deep correction to reach 0.9932 but I suspect that while 0.9947-50 caps that we could see a blip down to 0.9910-15. If this occurs it will imply a 3-wave decline and as such it will raise the risk of a complex correction - although this will need to be observed carefully. If that 0.9910-15 low is seen then if we are to see a triangle then the 0.9970-80 area could cap - but observe momentum. If there are bearish reversal indication be cautious as it could trigger the triangle. Otherwise, any stronger bullish momentum could take this back to the 0.9998 high. The next higher degree target is at 1.0066 or 1.0108.

COUNTER ANALYSIS:     Only a direct break below 0.9900 would cause some problems and I can't see particularly strong supports. Maybe 0.9840 could support. If broken then look for 0.9810-15 and if below then 0.9750-67…

Good trading
Ian Copsey

Swings – or roundabouts…

What a weird old day… GBPUSD did a mini-repeat of the collapse, USDCHF whipped higher to reach the next intermediate projection target while EURUSD – normally the leader of the pack – slipped lazily below 1.0859 in a dreamy haze and then suddenly woke up and whipped up higher. I guess there was a degree of correlation in terms of direction but the degree of the moves were totally haphazard. I assume that some sort of fundamental catalyst prompted the move and tends to suggest further entertainment today.

Even USDJPY saw the break above 104.47 that signalled the rush higher – and even sharper decline. Thus the major Dollar-currency pairs are looking good for another push. If there could be any problem, it could be in USDCHF. This is down to a mini-minor Wave ii that may provoke a complex Wave iv. Therefore, until this potential snafu is denied, I’d suggest taking care. Watch the lower degree development to determine whether the correct size waves are developing as they should…

I also note that the 4-hour Price Equilibrium Clouds are Dollar supportive but actually testing the Cloud. If the above description occurs then we may well see price oscillate around the Clouds… Given that AUDUSD appears to be more buoyant than I expected, it may well imply the same.

Finally, just a note on EURJPY: The triangle that appeared to work so well – even stalling at the lower end of the range in the Wave ^e – well it appears not to have been a triangle although it looks like one. That should suggest losses.

Take it stage by stage to identify whether we can still see an immediate trend – or just a consolidation…

Good trading
Ian Copsey  

Tuesday, October 25, 2016

Correction completed – or not?

I can’t say I’m too surprised with yesterday’s long and winding and twisting and wonky road that may have – or may not have – led to a door but could also be a portal to yet more of the same…

My own expectation is for more. If so, then we’ll see the boundaries widen to further horizons. Hence, this is the basic outlook I have for today.

But, however, nonetheless and on the other hand there are two pairs that have a slightly different position – USDJPY and AUDUSD. The former surprised with its strength. It has the potential to follow-through but there is a key level that could stall the upside and see a recycling. Therefore, take note of the magic portal that would take it into the blue sky. This is going to be important for EURJPY also because it could change the outlook in the cross. Approach this with care.

In the Aussie, the pullback higher was perfect and the next target I mentioned yesterday remains intact. While the current decline is part of a directional move, the risk is kinda similar to a consolidation since it tends to argue for a two-way day.

So all-in-all the risk appears to be for a narrow range day in general. Best keep trades to the short term

Good trading
Ian Copsey