Friday, December 9, 2016

DAILY FORECAST FOR EURUSD

INTRADAY CHART
BIAS:             Allowing for a pullback between 1.0653 - 1.0710 (max 1.0740) we should see losses resume

Resistance:     1.0630     1.0653-79     1.0700-10    1.0725-40

Support:          1.0597     1.0575          1.0535-55    1.0503

MAIN ANALYSIS:           It seems the Wave iii I had not really expected actually worked well. Just before sleeping I saw the break higher and therefore it needed a move into the 1.0865-1.0887 area. The reversal was so sharp that it's very clear that the downside is back on track. At the very most, the 1.0725-40 area will cap. However, I am doubtful about it reaching that high. I suspect the 1.0653-79 area will cap - but maintain observance for bearish reversal indications. Once this pullback is confirmed we should be heading for the 1.0503 low - possibly the 1.0462 area.

COUNTER ANALYSIS:   A direct break above 1.0750 would surprise and suggest a move to the retracement extreme at 1.0890-1.0922. Only above would break the daily downtrend.

Good trading
Ian Copsey

The ECB committed…

Before I lay my weary head on the pillow, knowing that EURUSD would rally, I made an estimate in my spreadsheet for the rally to reach 1.0872. I thought the move higher was going to be slow and I’d get up and check for reversal indications. Then came the ECB… The estimate was just a rough area (so was just lucky) but when I saw that precise high on my chart followed by the collapse I kicked myself for not putting in a sell order…

That sets the scene for the next trend. So now we need to establish the lower degree structure – plotted in the spreadsheet – to establish the targets for the next stage. This is basically the same for all Dollar-currency pairs and should be approaching targets over the coming months that I set at the beginning of this year. If there is any odd-one-out then it is AUDUSD that has (as we have seen over the past 8 months) has decided to go on a sit-down strike and refuse to form a daily trend. However, having said that, it is conforming to the same direction for now.

The question for today, following yesterday’s price shock, is whether it will end the week in a consolidation or just push on with the trend. Thus, we shall need to see what Europe will do. Which of the options will occur, I’m not too sure, but the final outcome is pretty clear.

Have a great weekend.
Ian Copsey  








Thursday, December 8, 2016

Commitment issues

It seems that the market didn’t want to commit to a direction yesterday. It was in a tizzy, flustered and confused – ending the day almost without any real motivation. It was only GBPUSD that surprised on the direct follow-through but then the market had the only pattern – the wedge – to work with. So we have to work out which side of the market is going to break first. Up or down… down or up? Perhaps both. Surely, it can’t be a sideways range…

So basically we have to trade the break. As far as I can see it should follow-through. That EURUSD made a valiant attempt to conquer the 1.0796 high was only to be expected. The additional problem we have is that we are having to rely on lower degree reversal indications rather than a combination of multiple timeframe indications – but the sideways move has basically excluded an hourly trend signal.

This includes AUDUSD also, it’s boomerang very clearly under the influence of a hefty intake of the amber nectar. The past week has seen it meander into the Outback, under the sun and can’t seem to find its way. It’ll come good at some point…

Equally, EURJPY may well be forming a bullish flag… but wait for the trigger. The only concern I have is that both pairs will most likely point in the same direction (bullish vs bearish) and we’ll have to see which of USDJPY or EURUSD accelerates first…

Patience today. Hopefully we’ll see the break…

Good trading
Ian Copsey  







Wednesday, December 7, 2016

DAILY OUTLOOK FOR USDCHF

INTRADAY CHART
BIAS:       I am a little blind sided but following the EUR route, I suspect we can see a deeper decline

Resistance:    1.0115      1.0135      1.0145          1.0170-81
Support:         1.0078      1.0049      1.0012-25     1.0000

MAIN ANALYSIS:    If we are to see this pair rally we need a break above 1.0135-45. If seen, then we can look for gains to test the 1.0170-81 resistance. This could provoke a correction - but shouldn't be too deep - and then later see gains above 1.0204 and through 1.0225 to the 1.0250-55 area.

COUNTER ANALYSIS:    - While 1.0135-40 caps there is a risk of follow-through lower. A break below 1.0078 would encourage but below 1.0049 would confirm to see losses down to 1.0012-25 for a correction of around 50-60 points and losses down to 1.0000 (allow for 0.9958-80 - although I doubt it will get that low...) Watch for bullish reversal indications from 1.0000 onwards...

Good trading
Ian Copsey

Laying the foundations

It was hardly a constructive day – but then I hadn’t really expected any spectacular moves. I’m not really expecting much today. We appear to be in a temporary lull, not just in Asia, but across the market following the rapid rally in EURUSD while the rest of the market could only offer somnolent reactions. I have to admit that there is a certain complexity to the balance of the market – not the long-term outlook, but more the lower time frame development. I’m pretty certain that GBPUSD is on the right track. We just need the others to sort themselves out. However, somehow I feel today could provide enough information to be able to generate a more directional move.

There is one element of which we need to be aware. That is the tough year we have seen overall and the approach to the Holiday Season when, frankly, the market doesn’t really like to do very much. I tend to find that Decembers are either tedious and wrapped up in complex corrections or, with the depletion of liquidity, the alternative is for sharp trending moves. Thus, we shall need to wait and see which of the two will entertain us over the coming month.

Basically, we should be looking for key break levels that can trigger the next move – whether this be corrective, ending or trending.

Take care again today…

Good trading
Ian Copsey  








Tuesday, December 6, 2016

A wolf in sheep’s clothing

The early morning collapse was just what the doctor ordered – except for the 300-point rally thereafter (in EURUSD.) Cobwebs dusted, I now have to pick myself up and sort it all out. While this was a surprise detour it hasn’t changed the expected outcome I have had from the start of this year. That GBPUSD also followed the lead of EURUSD was another pain in the proverbial backside but, at least, it is still fitting into the targets I have been pointing to – at least in terms of the maximum pullback.

Overall, I feel the vast bulk of the move is over and we just need a tail end move to complete the pullback. This will likely overlap with GBPUSD but the possible problem could be the identification of the expected reversal. In EURUSD the rally was so sharp that momentum is not particularly clear and we may only see a limited hourly bearish divergence – although we do have a 30-minute divergence…

Even AUDUSD whipped back higher within a final zigzag in a triple three – well almost at this point – just to twist the knife into my stomach to show it was king. This should develop similarly to EURUSD today.

Finally the JPY pairs… USDJPY provided a decent rally but then a sharp pullback. It may deepen a little more – but it’s not a requirement. The only reasoning is the expectation in EURJPY that appears to need a pullback lower first.

So this could be a tricky day – at least for the first two-thirds of the day – but keep looking out for the reversal…

Good trading
Ian Copsey  







Monday, December 5, 2016

Hardly a squeak at all…

All that trouble the market had trying not to upset the status quo ahead of the Non Farm Payrolls end up as a damp squid. All that adrenaline, all the build up to the witching hour came to nothing. Nevertheless, the rest of the development across the Dollar-currency pairs worked extremely well – with the exception of AUDUSD where Grannie’s knickers got even bigger…

The start of the week should be relatively steady. Some pairs haven’t completed their current development - although most have – and this should see some initial moves that will set up the next foundation legs to see follow-through. We should be able to spot the general area where these foundation legs may stall - within a broad range - so we’re going to have to be patient to then take advantage of the stronger legs of the coming directional waves. However, I actually feel that the week will start pretty slowly with the 4-hour Price Equilibrium Clouds seeing some swings around the Clouds.

Although I hadn’t expected the outcome in the Aussie on Friday it does provide a strong expectation now. The deep pullback I referred to on Friday – that then became even deeper – implies a similar outcome as I was considering in the mini-version. Thus, we’re still going to get a few swings around the 4-hour Cloud. Gee, this pair is a hard nut to crack – and I wouldn’t mind betting it’ll continue that way.

EURJPY made a new high at 121.89 but has seen some decent losses – ones I had thought we’d get earlier on. We should see some losses today but later there is a risk of a deeper pullback – so it tends to echo my comment above about having to be patient…

Today should be a steady but likely limited range day…

Have a profitable week
Ian Copsey