Wednesday, February 29, 2012

DAILY ANALYSIS FOR EURUSD


BIAS: Be aware of the risk of resumption of the uptrend…

MAIN ANALYSIS: I am beginning to consider the possibility that we have seen the correction end at 1.3366. Watch the initial development today. If this is to rally directly then the first move today should reach the 1.3490-02 area. From here the risk is then for a correction back to 1.3442-56. While this supports there is a stronger risk of gains back above 1.3502-15 to the 1.3540-48 area. Take care here as this could cause a minor dip. However, overall this should then maintain the rally with the next target up at 1.3675... and probably enough for today & more likely tomorrow. 

COUNTER ANALYSIS: Thus, any failure to break above 1.3502-14 would concern and then we need to consider the more conservative alternative of a move back down through 1.3440 and then retest the 1.3366 low. Also note support at 1.3314-42. 

Good trading
Ian Copsey

Can it? Can’t it? Surely not… but it looks like it can…


Yesterday I declared a period of consolidation. This morning, after dragging myself out of bed, I looked at the charts and wondered… USDJPY met a solid support, EURUSD has done enough to satisfy a pullback but it was GBPUSD that struck me the most, not so much because of the depth but more the manner of the decline that, with it surpassing the 1.5901 high, makes it difficult to slot into a complex correction. The structure in EURUSD is different but the surge back towards the 1.3486 high has a similar impact – I can’t see this as implying a complex correction…

The only currency pair that didn’t generate the same doubts was USDCHF. Here I find the pullback way too shallow and this was one of the factors for me calling the longer lasting correction yesterday. I still find it difficult to slot in with the others but this pair is one I’d rather not get too tied up with a view as it has a different character footprint to the others.

So, let’s just say that I feel we should consider a direct resumption of the bearish Dollar-Europe trend and be prepared to jump on its back. What is more alarming is the implication in EURJPY for if both EURUSD and USDJPY resume their rallies together the cross has quite startling implications for the next projection target given its very shallow correction from the 109.95 high… Thus, if these respective trends become a reality look more for the cross for not just a bang for your buck but what looks to have potential to be an explosion.

Thus, take the early stages with care. Remember that USDJPY has a harder task to prove the upside can extend directly. Ensure the breaks confirmed and employ a trailing stop…

Good trading
Ian Copsey

Tuesday, February 28, 2012

DAILY FORECAST FOR EURJPY


BIAS: While 108.01-10 caps there is still risk of extension lower to the 106.74-84 area

Resistance: 108.04-10 108.34-44 108.84 109.22-50
Support: 107.60 107.19 106.74-84 106.31

MAIN ANALYSIS: No new high above 109.95 but steady losses which I feel have not quite finished. While the 108.04-10 area caps I feel the stronger risk is still lower and down to the 106.74-84 area. I look for that to support for a recovery. Whether this will see the uptrend resume or remain in a sideways range has to be judged later - I suspect it could turn out to be an extended correction. 

COUNTER ANALYSIS: Only directly above 108.20 would trigger gains up through 108.34-44 and to between the 108.84-22 area at least.
Only directly below 106.31 would risk deeper losses to 104.60-90…

For more information regarding the support & resistance and medium term outlook please see the attached PDF file.

Good trading
Ian Copsey

Consolidation



After the early extension lower in the Dollar things calmed down. Although I would have preferred one minor spike lower the pullback hasn’t really altered the balance but there does seem to be a minor disconnect between currency pairs in terms of retracement expectations but only within the boundaries of a set of corrective structures. From a momentum perspective we have returned to an equilibrium currently finding Dollar resistance levels within the underlying trend. However, it looks more to me that instead of provoking a resumption of the downtrend we are more likely to see a period of consolidation. This may cause minor breach of yesterday’s Dollar lows, more likely in the Euro, but overall a period of sideways consolidation.

The above is also reflective of both USDJPY and EURJPY (except the trend is Dollar bullish) that probably enforces the anticipated outlook for consolidation. There does seem to be a possibility of a slightly deeper pullback in USDJPY but not by too much, and more likely to happen after a return higher towards yesterday’s 81.66 high. The larger picture does still look bullish in both JPY pairs but I suspect progress in USDJPY to be less frenetic and when the time comes the rally in EURJPY is should be driven by the Euro more than the Yen.

I’ll just add that the prospect of consolidation does seem to fit in well with the current position in the U.S. equities and even Asian equities, both of which are due minor corrections - although the U.S. still may show minor gains before the mildly deeper correction.

So time to take care. Don’t look for an excessive resumption of Dollar losses unless key supports break. The next 2-3 days looks more like benefitting from short term trades and taking profit when seen.

Good trading
Ian Copsey

Monday, February 27, 2012

DAILY FORECAST FOR GBPUSD



BIAS: I see the 1.5907-30 area capping for a correction lower

MAIN ANALYSIS: Well, Friday's gains have put any bearish fears to rest. Having said that we seem to be approaching a resistance area that should cap for a deeper pullback before we can see additional gains. This should see the 1.5907-30 area cap for a move back to the 1.5852-66 area and then later lower. There are minor supports at 1.5818-25 and 1.5790 but overall I feel that the correction should reach 1.5760-70 at least but we should allow for a little lower to max 1.5720-40. Once this pullback is complete we can see gains to the next target at 1.5982-1.6013. 

COUNTER ANALYSIS: At this point I'd only get concerned if price breaks down below 1.5700 now...
Directly above 1.5930 would see 1.5982 directly…

For more information regarding the support & resistance and medium term outlook please see the attached PDF file.

Good trading
Ian Copsey