Friday, November 30, 2012

DAILY FORECAST FOR EURUSD


To follow on from yesterday's comments:

BIAS: The 1.2944 - 1.3038 range appears to be critical to the next larger move

Resistance: 1.2984 1.3013 1.3030-38 1.3056
Support: 1.2944 1.2925 1.2899 1.2880

MAIN ANALYSIS: We saw gains as expected.. But actually much stronger than I had thought to reach 1.3013. Being the upper end of the target I suggested on Monday there is a risk that we've seen a more cumbersome final push higher. However, within yesterday's rally I feel that we should also consider the possibility of an even higher high. Thus, we have three options today:

- that we see a break above 1.3013 that should extend gains into the 1.3030-38 area and then reverse lower.

- that price breaks directly below 1.2944 which would take us back to the prior expectation of deeper losses, initially back to just above the 1.2880 low but later towards 1.2825-37 at least.

COUNTER ANALYSIS: Only a direct break above 1.3040 would suggest we saw the correction end at 1.2880 and therefore we should be expecting more direct gains again. Note the 1.3083 corrective high and pivot resistance that could stall the move. Above there would extend gains that should then make their way back to the 1.3139-72 highs... and potentially 1.3192-1.3221...

MEDIUM TERM ANALYSIS:
30th November:   Yesterday's new high - and up to 1.3038 - could still fit in an initial rally. However, the 1.2880 low was just short of a 38.2% retracement of the rally from 1.2661 - 1.3008 and thus could be considered a complete correction. It is therefore worthwhile being aware of a more direct follow-through higher. Thus, while 1.3038 caps there is still a chance we shall see a deeper correction and back towards the retracement areas (will need adjustment) as I have mentioned. However, any break above 1.3040 would suggest direct extension in the second leg higher and I suspect to the 1.3192-1.3221 area. That will need fine-tuning but should then see a much deeper correction.

Good trading
Ian Copsey

There seems to be a bit of a battle going on…


The day started well seeing Dollar losses extend as I had expected... but later not as expected… EURUSD made a marginal new high, GBPUSD edged a little above my target but not too excessively and USDCHF retested the 0.9253 low. My first thought when seeing 1.3013 was that I had called the 1.3003-13 area as the potential top on Monday and 0.9252 the expected low in USDCHF. Maybe, I thought, we’re seeing a retest and I had misjudged the Euro high. However, when looking at the structure in yesterday’s Dollar losses that would imply that outcome it didn’t add up. Thus, the risk of follow-through today seems to be most likely but I doubt by too far.

I wish that was the only issue. There’s more…

If EURUSD is going up… then how will that impact EURJPY? Well, I could see the original higher target (that wasn’t met) being satisfied. Ok, I can cope with that. I don’t like these little whips that destroy my original outlook but these things can happen. However, the point here is that once EURJPY had reached that higher projection we should see a much deeper correction – and what we saw at 105.27 doesn’t appear to be enough.

However, we do have to take I into account USDJPY. My original impression there was that we may be seeing a recycling higher. If that was the case, yesterday’s development certainly didn’t support that outlook. Therefore, it’s left with one of two choices… Going directly higher… or extending losses a bit more. The latter must surely be the most logical outcome to generate the sort of decline in the cross I had been suggesting. If USDJPY pushes any higher then the entire short-term landscape changes to the larger underlying outlook and could impact on EURJPY… so take care…

The Aussie is doing what it does best to create as complicated structure as it possibly can, pushing the limits of corrections and then rebounding. However, at this point the underlying structure is still bullish…

Thus, just a bit of observation will be required. Take note of the key levels that constitute the limits in each currency pair and the implications of whether they hold… or break…

Have a great weekend
Ian Copsey 

Thursday, November 29, 2012

DAILY FORECAST FOR EURUSD


BIAS: There may be potential for the correction to reach 1.2974-95 before lower again

Resistance: 1.2960 1.2974 1.2990-95 1.3020
Support: 1.2944 1.2920 1.2898 1.2880

MAIN ANALYSIS: Yesterday's losses reached the 1.2872-85 target and has bounced from there as suggested. As mentioned yesterday this has potential to reach 1.2974 and I suspect we may need to allow for 1.2990-95. (The 1.2974 level may cause a 20 point correction before higher to 1.2990-95.) From 1.2990-95 or a failure at 1.2944, would suggest more direct losses back to yesterday's 1.2880 low. Below there note the 1.2857-64 retracement area and also the 1.2825-35 retracement and pivot support. 

COUNTER ANALYSIS: Only a direct break above 1.3020 would suggest we are more likely to see direct gains above 1.3038, 1.3056 and higher.

MEDIUM TERM ANALYSIS:
28th November:   The 1.3003-13 did its work and reversed price lower. Initial support is around 1.2870-95 but overall we need watch 1.2820-25, 1.2777-97 and even 1.2734-43. I do prefer a deeper correction at this point but we need to be alert for the next rally to resume. 

Only directly above 1.3008 and 1.3038 would retest the 1.3139-72 highs...

Good trading
Ian Copsey

From this point on the coming days look more choppy


Yesterday’s calls in EURUSD and USDCHF in particular were very straight-forward. That was the good news. From this point on it gets a bit harder. Currently the Dollar is correcting its losses from 1.2661 EUR and 0.9253 CHF and while the initial reversal target can normally be judged well, the problem with the wave we are now navigating is that that the retracement can be anywhere up to 100%. What’s more, in spite of the normal clamour to suggest the normal Fibonacci ratios - 50% and 61.8% etc – rarely do they ever really actually occur. What we do need now is to observe the structure, identify converging analysis and Wave C projections of the individual ABC moves.

Yesterday’s rally in the Dollar was just the first Wave A. Thus, we still have a long way to go and my general impression is that the correction is most likely to be deep. I have to add some caveats to that to try and bring in some supporting analysis from other currency pairs. The dink lower in GBPUSD ended my flirting with a higher high and in many ways I am more comfortable with that in terms of at where I feel this will eventually see the larger daily trend ending. This has had a shallower rally compared to EUR and thus less space to decline… but then it could decline more slowly. The Aussie has the ability to shimmy and suddenly trick, and I sense that could still slot in with my EUR & CHF outlook in a broad sense.

So within the straight Dollar-currency pairs I cover they do all seem to have broad potential for correlation. Thus, I have to resort to EURJPY. Certainly USDJPY is taking its time over the correction lower and I don’t think it’s ready to resume its own rally yet. Thus, I shall be placing a lot of emphasis on this cross rate and it still has further to go on the downside. The only “problem” is how direct this decline will be. Yesterday’s decline was a solid one and thus we are currently looking at a correction higher. That means we’re back to the more uncertain realms of corrective structures and the many variations.

Thus, coming back to the “from this point it gets a bit harder” comment… The basic outlook is for the Dollar to correct higher and therefore focus on identifying solid bullish trade set ups. Take profits early. Don’t get concerned if you could have taken more profit. Corrective patterns have the habit of tricking. Therefore, just take profit and prefer the Dollar upside.

Good trading
Ian Copsey

Wednesday, November 28, 2012

Readjusting from R.N. Elliott's structure to the Harmonic Structure

Many Elliotticians find the migration from looking at an extended wave structure that R.N. Elliott proposed into a series of 3-wave structures. In fact, there is not a lot of difference and this video describes how Harmonic Elliott Wave reorganises 5-wave moves into groups of three. By utilising relevant wave ratios this actually generates the ability to forecast with greater accuracy.




Good trading
Ian Copsey

More complicated development ahead


So far so good. Yesterday saw the Euro stall smack in the middle of the upper projection range and the Swissie just 1 point above target. The reversals have been standard and we should now be approaching the first stalling point. Thus, look for today to effectively be a reversal of yesterday’s development. There is more to go in this Dollar bullish correction. Price has broken through the hourly Price Equilibrium Clouds but only managed a marginal penetration of the 4-hour Clouds. We’re probably not quite ready to break free at this point and we may even see the 4-hour Clouds matching the progress in the corrections.

Right, those two were the clear winners in terms of forecasting but there were also a few interesting deviations from the two Continental Europeans. GBPUSD managed a marginal new high, not by much, and has corrected lower. This may well be positive to a certain extent and should it remain above this week’s lows while EUR and CHF move to their initial stalling points be aware of GBP taking advantage of their reversals to potential push to higher highs. I don’t expect frenetic gains so best not get carried away at this stage. I can probably include AUDUSD in that description also but this is less clear…

That leaves us with the JPY currency pairs… USDJPY failed to fulfill my downside preference and more appears to be developing in a more erratic development. However, there are a few alternatives, one of them being a direct resumption of the daily uptrend. Therefore it’s going to be important to remain alert. My impression is that while EURJPY fails to confirm losses there may even be room for a minor new high. However, the depth of the expected, eventual correction lower doesn’t seem to point to a resumption of the daily USDJPY uptrend at this point. I imagine the risk of a higher cross will likely come on a flat to marginally firm USDJPY and a correction higher in EURUSD…

Thus, overall the currencies that are in a correction have a much stronger risk of erratic and choppy price development while those that appear to have potential for extensions to their trends still have very close barriers that negate the threat of extensive follow-through. Thus, take care today and best not look for a home run today… Possibly the best bet is selling into a firm EURJPY…

Good trading
Ian Copsey 

Tuesday, November 27, 2012

DAILY FORECAST FOR USDJPY


BIAS: While 82.20-24 caps we should see extension to 81.61-71 and later 81.27-39

Resistance: 82.24 82.37-42 82.62 82.83
Support: 81.92 81.61-71 81.27-39 81.12

MAIN ANALYSIS: The high end of the 82.48-62 resistance capped well and from there we have seen downside progress. It probably topped out this morning at 82.21 but allow for 82.24. This should see it extend lower to the 81.61-71 area for a correction of about 30-35 points before extending losses to the 81.39 area (max 81.27.) From this point we need to take care as it could open up a variety of alternatives in a corrective pattern - or equally it could just allow the uptrend to resume. 

COUNTER ANALYSIS: Only a direct break below 80.95 would see the correction extend to a deeper retracement area around 80.32-63 (favouring the higher… though should EURJPY drop sharply and drag this lower then it's not impossible to reach 80.32...)

MEDIUM TERM ANALYSIS:
26th November:  I continue to favour a move down to the general 80.95-81.40 retracement area. Being a correction we have to consider stronger alternatives at 80.32-63. If there is any more complicated correction, and depending on the structure of the decline (if in 3-waves) we may find this developing into a complex sideways consolidation. I think we need to balance this with EURJPY.

Only below 80.30 followed by 80.03 and 79.75-80 would appear to dent the larger bullish outlook.

Good trading
Ian Copsey

A Dollar-Europe reversal higher is still on the cards


It was a day full of anticipation but instead left an air of being let down as the Dollar traded sideways. However, even that process has provided good information and in many respects I could publish yesterday’s outlook for a second time. Perhaps the biggest difference is in momentum. Quite obviously after a day of constant mini up & down moves (that must have been like watching tennis lying on your side) the momentum picture has adjusted quite substantially. Well, “potentially” may be a better word to use. Clearly the Dollar bearish momentum has waned to the point where Dollar bullish divergences are possible. The use of the word “possible” is probably the closest I can get to be definite.

Actually, there are a few other clues also, none definite but worth observing. The 4-hour Price Equilibrium Clouds spent yesterday busily catching up with Friday’s Dollar losses. In all three Europeans the 4-hour Clouds are hovering just above the Dollar while price strolled steadily sideways but unable to see the view due to the hourly Clouds getting in the way. Let’s just say it does provide the potential for reversal structures to develop… Now we need proof of the pudding that will confirm my projections have been correct.

I have to say that I’m pretty confident on the outcome as there do seem to be correlating indications across the board – the similar expectations in the Europeans and Aussie and the sharp losses expected in EURJPY – that I don’t think will be driven by USDJPY. Indeed, EURJPY could be key although the follow-through lower in Dollar-Europe does have tight target ranges. I also see U.S. equities approaching a natural resistance area that should spark a reversal…

There is a little note of caution to add. While I am expecting the Dollar to correct higher I would like to hold back from suggesting it’ll be a wham-bam-thank-you-mam type move. This is implied due to what I see as a slight mismatch in GBPUSD versus the Continental Europeans and also from the 4-Hour Price Equilibrium Clouds that will probably not be penetrated immediately on reversal. On the bright side, it could perhaps provide us with additional Dollar buying opportunities…

Overall, probably not a fast moving day for the Europeans and Aussie… USDJPY… more of the same but building up to a reversal higher also…

Good trading
Ian Copsey