Monday, April 30, 2012

DAILY FORECAST FOR EURUSD


BIAS:   This should see a poke higher to 1.3285-00 before the final pullback

Resistance: 1.3252 1.3270 1.3285-00 1.3320
Support: 1.3225-29 1.3211 1.3191 1.3170-75

MAIN ANALYSIS: All looked possible for a while on Friday but the strong reversal from the 1.3157 level broke the structure and has seen a push through to 1.3252 so far and while 1.3225-00 area supports we should see a move into the 1.3285-00 area. This should cap for the drop I had expected on Friday. The initial drop should be back to around current areas (1.3235-45) and later extend losses.

COUNTER ANALYSIS: Only a direct break above 1.3310-20 would suggest that Friday's low was a stunted final leg. If seen we should see further gains back towards the 1.3385 high but should hold on first test… 

Good trading
Ian Copsey

Sucker punch…


I should have spotted that one… I hadn’t been prepared for the penultimate leg in the move higher in EURUSD to reach the final target range. With USDCHF falling short on the downside I should have considered the possibility. Thus, on Friday with price reversing back higher again the understanding dawned and we’re back to where I thought we were on Thursday and the consolidation drags on… What this should mean is that the Dollar should sink a little further today but then reverse to complete the final leg  - the one I had expected on Friday…

I should add a little caveat at this point. That GBPUSD and AUDUSD took the opportunity to extend their thrust higher in such a solid manner does tend to imply that they’ve decided to resume their rallies directly. I just have these doubts about the depth of the expected final leg higher in the Dollar against EURUSD & USDCHF compared to what should be a much shallower correction in GBP and AUD. It is possible but it’s something to watch with care. The only alternative would be that Friday’s Dollar gains were (exceptionally) stunted final legs. I’d rather work with break levels to have that confirmed though.

What was the bigger surprise was USDJPY that was sitting comfortably on a couch when a spring broke and poked it higher but then collapsed in pain to fall into the resultant hole left by the rogue spring. In some ways, while disappointed, there was always a mild potential for one more drop but the structure of that drop is rather strange to say the least. There are deeper correction levels and with a modestly healthy daily bullish divergence now developing together with a supporting 4-hour bullish divergence I’m not turning my head lower at this point. I’ve seen charts showing the huge resistance line from the early 1970’s but that’s quite a flimsy and unstable line and the type that touches once because everyone can see it... only for it to then break. Trend lines are one of the most abused techniques in technical analysis… Therefore, I’ll work with price and I’ll still say this will go higher but probably after one more dip.

So today is a rewind of Thursday – one more low in the Dollar for a modestly deep pullback – and watch the downside in USDJPY…

Have a profitable week
Ian Copsey 

Friday, April 27, 2012

DAILY FORECAST FOR EURUSD


BIAS:   This has a "standard" target around 1.3033-67 but also be aware of the 1.3085-05 area…

Resistance: 1.3198 1.3220 1.3241-62 1.3285
Support: 1.3172 1.3152 1.3118-40 1.3067-86

MAIN ANALYSIS: The 1.3250-85 target capped perfectly and we are on the way down to what should be the final downside leg in the consolidation. The only thing that has left this a little precarious is the shallow initial decline to 1.3198 followed by a deep pullback which implies a rather elongated final decline. This has begun and just where we get the intermediate low will determine the final low. The 1.3152-72 area looks most likely at this point which would probably limit the downside to 1.3085-05. If we see an earlier extension to 1.3118-40 then the final low could be down around 1.3067 which is the "standard" projection in this type of consolidation. However, do also note the next - also "standard" at 1.3033. Look for reversal patterns/bullish trade set ups anywhere below 1.3105...

COUNTER ANALYSIS: If there is any other risk - and because the entire correction from 1.3486 has been rather complicated we should be aware of the risk - any break below 1.3025-30 could extend the downside to below 1.2994 and hit the deeper retracement levels at 1.2953-79. Also note the 1.2911 retracement level though I feel that's a bit too low...

Good trading
Ian Copsey

Last leg of the ultimate leg?


Well, I can claim success with EURUSD yesterday with the high smack in the middle of the projection area I have highlighted all week. The other currency pairs weren’t quite so solid with CHF and GBP falling slightly short of targets before reversing while the JPY pairs limped off the stage as my supports broke.

So… we come down to what should be the final leg. At least that’s the plan. There is just one final alternative left floating in the air – and that’s for the entire correction from 1.3486 to dip to one new low but I can’t see GBPUSD being able to absorb a similar move and it would complicate the USDCHF structure. Thus, for now I’ll stick to my guns and say we should now be in the final leg of the final leg of the consolidation from 1.3486… The last thing to point out about EURUSD is that whether we stall within the consolidation scenario or the minor new low below 1.2994 both imply a total reversal higher so the eventual outcomes remain the same…

Just concentrating on the consolidation I have to add that I’m just a little wary of whether normal targets will be reached. As I mentioned, USDCHF fell short of normal projection ratios, as it did at 0.9251, and suggests potential for a cramped final leg also. Thus, I feel that we’ll need to be a little touch and feely for this leg with the risk of a dead leg apparently quite high. I suggest you take note of the areas for this correction across all three Europeans and look for a correlation.

USDJPY… Flip… just when I thought it was on its way higher it pulls the rug from under my feet. I still treat this just as a deeper correction but in the short term we need to have confirmation that yesterday’s low was the end as I do also see risk of one more low before it recovers. The outlook is hampered slightly by EURJPY that has been dragged down by both USDJPY and EURUSD and may well be in a consolidation before the upside resumes. More touchy and feely stuff needed here too…

So today’s one of those days to employ trade set ups to confirm targets… (as they should be all the time…) It’s probably best to test the water first with smaller initial trades and once the direction has been confirmed then add to the size as the next trend should be pretty persistent…

Have a great weekend
Ian Copsey 

Thursday, April 26, 2012

DAILY FORECAST FOR EURJPY


BIAS:   Price should now extend to 108.28-58 and later to 109.35-50

Resistance: 107.65 107.99 108.28-58 108.80
Support: 107.07-25 106.80 106.31 105.41-74

MAIN ANALYSIS: As expected the first move yesterday was back to the 107.09 area, the low seen at 107.07 and was followed by a return to the 107.60-70 area. This should now extend towards the 108.28-58 projection (and I tend to favor the higher.) Look for a correction of around 40 points before the next leg higher around 109.35-50. Here I see a cap developing and for a deeper correction lower...

COUNTER ANALYSIS: Only a direct break above 109.90 would concern and risk a more direct rally as far as 110.98 and beyond there is the 111.43-59 highs.
Only a break below 107.00 would frustrate and then we'd have to be cautious of a recycling back to the 106.31 low. Also note the deeper 105.41-74 retracement area. 

Good trading
Ian Copsey 

Last leg of the penultimate leg…


While this week has been slow it has allowed for a more relaxed approach to analysis instead of being whipped around at whim as the market careers this way and that. The results, particularly in EUR & CHF have been pretty much spot on and as such it has provided a growing confidence in the larger picture since the 1.3486 high EURUSD. The consolidation phase is still not complete but we are but a stone’s throw away but first things first, we have to see out this last dip in the Dollar to complete what should be the penultimate leg…

That final leg is already under development and should end today. The result will be the final leg of the entire consolidation so by the end of next week we should begin to see the Dollar begin to wilt. Every now and then I look around at comments here and there and while it’s obviously just a small sample I am seeing more and more commentators haggling for the Dollar to strengthen. Perhaps that is the contrary indication we are looking for and assuming there are positions being built on this we should see some position covering once the opposite happens…

Evidence elsewhere? Plenty… GBPUSD is flexing its muscles and causing shallow corrections that promise some quite robust gains before long. The Aussie too has frustrated me as I have been bullish for a long, long time and this is beginning to make a promising start to the next leg higher.

Even USDJPY and EURJPY are shaping up for strength, albeit Dollar bullish, but a repeat of the last sharp rally in both looks set. Given the expectation of both EURUSD and USDJPY rallying the best bang for your buck is going to be in EURJPY, or you could even try GBPJPY…

But first things first. We are not quite at the stage where the stronger directional moves are going to develop. We have the expected pullback in the Europeans starting later today and either ending tomorrow or more likely early next week. Even USDJPY and EURJPY will require a correction after what I feel is the strength developing now. The Aussie is due a pullback too. However, all these should provide a good opportunity for the spring to uncoil…

Good trading
Ian Copsey 

Wednesday, April 25, 2012

WEEKLY OUTLOOK FOR GOLD

DAILY OUTLOOK



24th April:

This does seem to be stabilizing and in line with the overall preferred bearish outcome. While not impossible for the coming Wave -c- to reach the Wave -iv- target I feel that there may well be more chance of two more ABC moves that should extend losses to the 1,392 target.

A break above the 1,790.51 high would imply a stronger rally... Before reaching there note pivot resistance at 1,705-15 which is where I have tentatively placed the Wave -b- label. 


INTRADAY OUTLOOK


24th April:


The pullback in Wave b was a little deeper than expected reaching around the 85.4% retracement at 1,623.14. I suspect this should now rally in Wave c and probably to the 114.6% projection around the 1,701 area that matches with a 50% retracement. However, it's still worth noting the 61.8%-66.7% pullback at 1,722-31. 

Once complete look for losses to develop in Wave -c- lower.

Good trading
Ian Copsey

DAILY FORECAST FOR USDJPY


BIAS:   This appears to be building a base for further gains but still at an early (choppy) phase

Resistance: 81.38 81.50-60 81.78 81.98
Support: 81.27 81.01-23 80.85 80.64

MAIN ANALYSIS: We saw the initial drop precisely to 80.85 but from there the recovery pushed back above 81.15-20 and thus the risk of a break below 80.29 appears to have been averted. At this point, until 81.40 breaks there is still a minor risk of a new low below 80.85 but remaining above 80.29. However, I feel that possibly while I'm writing this report we should see a small blip higher to 81.45-60 but then a correction lower. This correction should reach the 81.01-23 area from where a stronger move higher can then break above 81.60 and then towards 82.23-50, a pullback and then 82.75-99.

COUNTER ANALYSIS: Therefore, we should sleep easy as long as there is no break below 80.29 and before that anyway we'd need a break of yesterday's 80.85 low which I feel is a low probability. Just in case, any loss of 80.29 would still see support at 80.01-10 and at most 79.39-70.

Good trading
Ian Copsey

The long and winding road…


At the end of last week I thought perhaps we’d be seeing the end of the consolidation in the Europeans by today. Unless someone winds up the market to “fast-forward” there doesn’t seem much chance of that happening today. The speed at which these final legs have been developing even suggests it could take until Friday before the market can be shaken out of its coma next week…

However, overall I have to say the Europeans are all is going to plan – in terms of price development that is – and really quite well. The Dollar lost out yesterday much as expected and may just extend slightly today but we’ll still need a correction before this leg lower is complete. The way things are going that should take us into late tomorrow and then there is still the need for a last attempt back higher before. Even GBPUSD that I pointed out as being in a slightly different situation has succumbed to the “go-slow” but rather than this being negative I find it quite encouraging to see the three beginning to edge their way back into correlation.

USDJPY stalled perfectly at the 80.85 target I mentioned yesterday as being critical. At that point it could have still been in a bearish structure but the reversal higher has been too deep. While I cannot 100% rule out another dip at this point this deep pullback suggests there will be no break below 80.29. As long as we see a new high above 81.41 it will more likely not even see a break below yesterday’s low although a correction will be required soon. This should keep EURJPY on its bullish track and I expect further gains today, possibly more driven by the Euro that JPY.

Even the Aussie appears to have completed its deep pullback and looks positive. Thus, in the overall picture all pairs are pointing to eventual Dollar losses. It’s just a matter of time but perhaps now we have to exercise patience before the downside becomes stronger.

Today play the ranges, the Dollar making minor initial losses for a pullback but remember there is still one more leg lower to come after that.

Good trading
Ian Copsey 

Tuesday, April 24, 2012

DAILY FORECAST FOR GBPUSD


BIAS:   It seems more likely we shall see gains - but take care…

Resistance: 1.6149 1.6166 1.6196-08 1.6223-49
Support: 1.6104 1.6077 1.6037-57 1.5990-10

MAIN ANALYSIS: Indeed, the downside proved the stronger…but then actually not too strong to stall 2 points above the initial 1.6070-75 support. At this point in the structure yesterday's correction, while quite shallow has done more than the minimum for a pullback so we must be aware of the direct upside risk, especially considering the other Europeans should strengthen against the Dollar. Thus, a break above 1.6149 should extend gains through 1.6166 to 1.6196-08 at least. Take care here as a pullback may be possible. A break above would extend gains but at this point, until I have more data to work with, it's a bit difficult to judge where there can be intermediate stalling points. 

COUNTER ANALYSIS If this bucks the expected trend then a break back below 1.6104 could open the way for losses back to yesterday's 1.6077 low but then note the 1.6037-57 area that could end the correction and trigger gains. Also note a deeper retracement area at 1.5990-10.

Good trading
Ian Copsey