Thursday, April 27, 2017

Back into the range?

For the most part yesterday was basically following the template I had expected – bar AUDUSD. I’ll handle the Aussie first to get that out of the way. I had thought we’d get a triangle and it began to look like it would develop… but… then further losses developed. The downside was always going to be the eventual destination but it just skipped the triangle…

Otherwise, most targets were on target – or pretty close. I can’t really suggest that USDCHF had any targets and instead basically kept itself to itself – preferring not to hustle the other pairs that seemed to have more work to be done. Equally, GBPUSD completed the task I asked for and this will most likely continue to react slowly and surely but without any particular rush. I tend to feel this pair needs to remain in slow motion for a while yet.

EURUSD and USDJPY completed their tasks – and in the process allowed EURJPY to complete its expected outcome. We should now see more of the downside in the cross now and this will require EURUSD to bear the bulk of burden for some while to come.

Although I have some slight doubts due to the Dollar Index, the major outlook should revert to a more bullish Dollar. If there is to be any new low in the Dollar Index I suspect it will be brief.

Good trading
Ian Copsey  

Wednesday, April 26, 2017


BIAS:              The triangle scenario appears correct

Resistance:    0.7552     0.7565-70     0.7584     0.7600-10

Support:         0.7505     0.7491          0.7473     0.7448

MAIN ANALYSIS:            The break of 0.7547 has confirmed a modest triangle that could reach the 0.7505-10 area approx. From here we shall need a pullback to around 0.7565-70 followed by a brief pullback for the rally to break higher.

COUNTER ANALYSIS:   Only a direct break below 0.7500 would risk direct losses back to 0.7491 and below to 0.7448 at least - and could be lower…

Good trading
Ian Copsey

Coming to a conclusion?

Unlike Monday – after the gap – yesterday actually provided some more positive movement. Indeed, it appears to be approaching a turn. Even then, the balance of the movement in the individual pairs was rather haphazard. Both USDJPY and EURUSD continued their gains, thus pushing the EURJPY cross much higher but equally both pairs appear to be very close to a reversal. Indeed, this is very much required for the daily structures.

At the same time as EURUSD and USDJPY have been so strong, USDCHF managed to act as an uninterested bystander. It did have the potential for another bearish zigzag but spurned the choice to do so. Therefore, I feel we need to be prepared for losses in both EURUSD and USDJPY – although the latter will likely only see a correction lower while EURUSD needs an impulsive decline.

As for GBPUSD… the poor sleepy head had to rustle up some enthusiasm to extend gains. It’s a weird and pretty slow moving ice flow that seems like it may well continue in that mode for a while rather like an incestuous relationship with itself. That said, at some point, it must begin to turn lower – but I don’t think it’s particularly imminent. 

I raised the potential for a triangle in AUDUSD and that it seems to be developing – at least the second leg. This should keep it occupied for a day or three more but then likely see a second rally. Basically, this saga that began around one year ago looks like continuing…

It seems like a slow day but at some point – whether it’s today or tomorrow – we should begin to see stronger directional movement.

Good trading
Ian Copsey  

Tuesday, April 25, 2017

A blank jigsaw puzzle

After yesterday’s initial flash of fireworks on the open the market settled for a more pragmatic outcome – consolidation. Even the U.S. equities provided a similar outcome. Yes, there appears to be a likelihood of further Dollar losses but keep one eye on the break levels. What we are looking at is either a final follow-through or a break higher in the Dollar that will imply we have seen a corrective sequence. This applies to EURUSD and in USDCHF, the latter requiring a final zigzag.

As for GBPUSD, the day past away as if floating in the air with bubbly clouds and pretty birds that twittered their position – which wasn’t too difficult given the 65-point range… I still tend to feel that we should look to break levels. Frankly, yesterday’s flush rush in the other pairs seems to be an overreaction.

This also appears to be the need for further gains in USDJPY given its incomplete structure. However, we’re close to a break lower so keep an eye on the downside if this breaks. This tends to suggest that EURJPY can also benefit from the influence from both parties but once both pairs have done their job, we should begin to see a more straightforward outcome – a reversion back to Dollar gains.

Even that can be said of AUDUSD although it has the potential to develop in a consolidation.

So today * should * be a little more straightforward that yesterday and assuming the market begins to develop in a more orderly fashion we are likely to move back to the Dollar upside by – maybe today or possibly through to tomorrow…

Good trading
Ian Copsey  

Monday, April 24, 2017

A little more to go – it seems

During my week’s break I have been following the market – mainly because I had to organise my charting software that had some bugs due to an inadequate interface with a Windows software (TradeStation) and a quirk in the virtual hard disk that is required on an iMac. I was particularly surprised that we didn’t see the reversal back to the Dollar upside. It was clear that in many instances that the development hadn’t provided alternation – thus it carried through over the week. Indeed, it actually looks as if we shall see further Dollar losses this week. With this morning’s huge spike that in EURUSD reached within 3 points of the 1.0906 high. This is now a squeaky bottom time. Will it break above 1.0906 to continue the rally or will it turn straight back down?

Of all, it was GBPUSD that completely ignored all else and rallied well above 1.2705. This, it seems, implies that the Flash Crash on the 7th October last year actually completed a 5-wave move. The depth of the recovery last week is where I had expected on the pullback in the (brown) sequence that began from the Brexit vote on the 24th June. This now requires us to confirm follow-through or losses.

The Aussie is sitting in no-man’s land. It has the potential for a deeper pullback – but also we have to consider the potential for direct losses. This pair is a little tricky so take care.

Thus, it looks like a difficult outlook for the moment and therefore it’ll be best to take things cautiously. Once we have established how this will move forward it will become a lot clearer. For now, we need to be alert to both sides of the market.

Have a profitable week
Ian Copsey  

Thursday, April 13, 2017

Expecting swings

Well, that was annoying… There I was, going through some analysis in the wee early hours of the morning and the market went bonkers. The reversal lower in the Dollar broke through the key barriers and I had to start over once again. The outcome appears defensive and corrective. The outcome implies that the 1.0569 low in EURUSD is now the Wave [i] – similarly with USDCHF as a high.

So the question is – how deep can the pullback penetrate?

Good question.

Well, we appear to have completed a zigzag and half in EURUSD. Can we rely on a triple three? Given this is a correction we’re going to see some two-way development and will need to observe carefully. Hence the headline “Expecting Swings.” Given we’re moving into a long weekend in Europe it makes the swing process more likely.

The theme of “swings” may also generate complex corrections. So, it seems as if we’re going to see some volatility over the next 2-3 trading days without really seeing any excessive follow-through… Take care.

Good trading
Ian Copsey