Friday, December 23, 2016

Signs of Dollar weakness

This is the last update for the year. Rather than look specifically for what may happen today – because generally the last trading day before Xmas is a super quiet day – I’ll provide a general outlook for the week ahead. I doubt we’ll see too much movement over today – although I’ve seen one or two exceptions when a large corporate trade causes bedlam in what is normally the least liquid day of the year, but they don’t occur that often

So, I’ll focus more on next week’s 4-day week and basically we should be seeing a weak Dollar on the whole. It’s always difficult to judge whether it’ll be a slow, grinding development, rather as we have seen this week, or a sudden rush of bravado in a stronger trend. Generally it’s one or the other and nothing in-between…

Overall, the larger picture is still very much the same. We’ve come from the EUR and GBP highs from mid-2014 and getting closer to the final stages – but I’m not expecting any final completion too soon. Moving into Spring I suspect some stronger daily swings again but that’s down the road. Even in that move into Spring there will still be some intermediate broad swings also. So it promises to be a rocky road to traverse.

I wish you all a splendid Holiday Season…
Ian Copsey  

Thursday, December 22, 2016

Still in creepy crawly mode

It’s the season and there’s nothing to be done about it but the lower degree development is bugging me so much. I have to delve into the 1-minute charts, occasionally tick-bar charts, to try and make sure that the ratio structures are correct and build up in the right manner. Over the course of this week there has been a preponderance of complicated lower degree structures that build up to a 5-wave move but you’d never be able to identify it just by eyeballing even a 5-minute chart. However, the underlying expectations remain the same and by hook or by crook the current structures will still *eventually* get to their destination.

Hopefully, today will make further headway, slow as it is, and would like to complete the current moves but it may take until tomorrow – or even the resumption of trading on the 27th.

This should see today a move higher in the Dollar in general although there are a couple of pairs – USDCHF and AUDUSD that may baulk the trend. Actually, even USDCHF should see some gains but I suspect more in a sideways consolidation. The Aussie has more potential for the upside.

As for EURJPY… well drifting still. It has a few options although I tend to prefer the upside so the balance between a bullish USDJPY and bearish EURUSD is going to make for difficult conditions for the cross.

Overall, there should be modest directional moves. Just try and keep awake in this slow market…

Good trading
Ian Copsey  

Wednesday, December 21, 2016


BIAS:                    It seems we need a pullback today before the upside resumes

Resistance:         117.89     118.24     118.40     118.66

Support:              117.64     117.39     117.11     116.98

MAIN ANALYSIS:            At 118.24 we saw the top of the first leg higher. There's plenty of room on the upside but across the pairs there is a general requirement for a pullback lower. Thus, I suspect a move down into the 117.11-39 area - it could be deeper but just keep an eye on bullish reversal indications. Once this retracement is seen the rally should resume - back above 118.24 and ideally to 118.77-95 at least. Allow for 119.25-46. From this high we should see a pullback. 

COUNTER ANALYSIS:   Only directly below 116.54 would see losses but I'd still be cautious in the 116.10-40 area being a deeper pullback in the Wave -iv-. Thus, below 116.00 - well it could hit the 50% at 115.89 but take note of momentum and any potential for further bearish losses or a bullish reversal indications.

Good trading
Ian Copsey

Slow Motion

I made the same mistake twice yesterday – both in EURUSD and GBPUSD. Such is the slow, scratchy, insect crawling development that leaves trails that lead to dead ends. In both, we are in a Wave -v- (so that’s a 3-wave move) and thought we’d get to the Wave -c-/-v- in both… Nope, the spider trails were too prolific and made the initial decline look complete – only to see follow-through and that was just the Wave -a-.

So back to the drawing board, we need to pullback for a while before the second leg in Wave -c-/-v- can be seen – but no doubt in super slow sloth fashion. Come on guys, I need to do some Christmas shopping in time for the weekend!

Needless to say, we’re most likely to see a pullback lower in the Dollar – and the recoveries from the lows in both EURUSD and GBPUSD had super complex structures and no doubt we’ll see more of those today. Probably the best approach will be to wait for the retracement areas to be hit…

In some respects, even USDJPY and USDCHF (which are in different positions in their situation compared to GBP and EUR) are moving in a similar way – but at least in general correlation across the majors. Still slow and slothful…

AUDUSD stretched the downside a little more than I had expected. It’s still a valid decline and moving to hit the first reversal target – and to the declining 4-hour Price Equilibrium Cloud. I don’t see too much excitement here for today.

As for EURJPY – most likely extending the move higher but watch the relative pace in EURUSD and USDJPY. There’s just a risk of consolidation…

Good trading
Ian Copsey  

Tuesday, December 20, 2016

Scrappy Christmas

If yesterday’s trading represented Santa’s navigation system I’d say he was royally inebriated… To be honest, at this time of the year, trading is more like pass the $$ parcel rather than looking for trades. Having said that, even if the route may be like a winding river, it will always find the appropriate ratios… weird as it may seem… If there is any downside it’s the lack of robustness that we saw yesterday. I say that because my EUR sell order failed by 1 point – but GBPUSD made a decent decline to a new low.

To be honest, EURUSD and GBPUSD are basically mapping out moves that have a degree of correlation between daily & hourly but in different sections of the structures – GBPUSD “lagging” the Euro in the daily charts. They’ll come together later but probably not for a 2-3 months at least.

So right now, due to the seasonal lacklustre in the market, we should continue to see swings in both lower degree and higher degree fractals. The targets, both downside and upside, are pretty much set for quite some while and probably won’t begin to see daily trends until well after the New Year.

For today we’re more likely to see most pairs being Dollar bullish – GBPUSD and AUDUSD probably being the exception to a degree. However, for at least half of today I can’t see too much excitement. By the second half we’ll see more movement but don’t get too carried away.

EURJPY has finally slipped lower but the structure is a little ambiguous. If USDJPY can manage to generate decent gains early on, it could help – mostly from a recovery in USDJPY most likely… However, don’t expect robust moves…

Good trading
Ian Copsey  

Monday, December 19, 2016

Moving into volatility

We are now at a mature stage in the decline from the 1.3993 high (EURUSD) and 1.7190 (GBPUSD). Once we pass the larger Wave (a) and Wave (b) of Wave (iii) the identification of high risk projection targets becomes a little easier to judge because the Wave (iii) is a factor of the Wave (i) range. That generally reduces the possible targets. Once those higher degree waves are identified, the next range of lower fractal Wave -iii- targets are reduced to just a few. I don’t want to suggest that we’re on the verge of a massive reversal – not by a long shot – but the way the fractals need to slot into each other becomes more apparent. Thus, there is more clarity for the projection targets in the higher wave degrees.

From today we’re moving into even more illiquid volume. Some sequences are not yet complete but there are some pretty clear expectations. The end result will be a broad swinging market – probably running through to the New Year. These swings are likely to develop over the next 2 weeks or so. One of the benefits we have right now is the differing structure between GBPUSD versus EURUSD and USDCHF. The Continentals are coming into Wave iii and Wave iv moves while GBPUSD is moving into a Wave (a) and thus will requires a pullback in Wave (b). In general this allows the Continentals to provide a rough limit to the pullback in Wave (b) (in GBPUSD) that can be as little as 5.6% but could be as much as 85.4%-93%...

As for USDJPY, we are now in a moderately advanced stage an intermediate rally that should still see gains but I feel the swings will be more directional to a degree. Much depends on the intermediate corrective swings and whether they will form in simple corrections or complex. This tends to cast a shadow over EURJPY that I still find complex and difficult to judge. The risk of a messy sideways move appears high.

The Aussie – has reached my target but I feel there is still some minor wriggles to be seen. However, the final outcome should follow the EURUSD path – in a sort-of fashion.

Have a profitable week
Ian Copsey