Thursday, January 31, 2013

TECHNICAL INDICATIONS 30th JANUARY


As usual, here are a few more observations from yesterday's developments. The charts display the day's support and resistance from the daily report issued around 2am-3am GMT and last for the rest of the day. 

Comments provide examples of integrating technical indicators and the implications. We're beginning to see more directional indications.

These indicators and daily support and resistance are available free of charge on the fast and responsive WorldWideMarkets MT4 platform. Contact me for more details or sign up here. (Offer applies to non-U.S. residents.)

USDJPY
EURUSD
USDCHF
GBPUSD
EURJPY
AUDUSD

Good trading
Ian Copsey



A little more clarity


Not a bad day at all yesterday, all going my way and a few close hits on targets. However, there were a couple of developments that raised the risk of a stronger extension in some pairs that will need some management. One positive development was EURUSD. Yes, it hit my target… and just a touch above… but more than that it seemed to provide a greater level of clarity in terms of the larger bullish structure. Indeed, all round, with the exception of the Aussie, the Dollar is seeing bearish momentum with the 4-hour and hourly Price Equilibrium Clouds all providing a cap for the Dollar. With yesterday’s moves the Dollar Index has broken lower also and tends to point to further losses and probably in two downward legs, the current leg being the first. This should keep us going for a while yet.

Having said that, I don’t think today is going to be quite so directional as yesterday. There does seem to be room for a minor follow-through but the larger risk is now growing for a correction and then it’ll be down to how long or complex that correction will be and just how quickly the next leg lower in the Dollar will resume. When this process develops the key will be the depth of the corrections in GBPUSD and EURUSD in particular. While EURUSD is in an impulsive move higher, GBPUSD is in a correction I think and it will be useful to match the projections in EURUSD with the retracements in GBPUSD. As for USDCHF… well, I’d like to observe a little longer as it’s very close to breaking the 0.9077 low. At this point, for now at least, I don’t think it will break but what it does next is crucial.

USDJPY rallied nicely although a little short than expected. It still has another leg higher to come before a deeper correction. Now this will have an impact on EURJPY, itself having reached my target yesterday but actually seems to have risk of breaking that limit for the target. It goes without saying that the balance between how much deeper EURUSD rallies and how quickly USDJPY extends higher... or not… is very important. Probably more to the point, I don’t see the cross collapsing right now.

Thus today looks a lot trickier than yesterday and mostly corrective I feel. Therefore, more care is required once again…

Good trading
Ian Copsey  

Wednesday, January 30, 2013

DAILY FORECAST FOR EURUSD


BIAS: While 1.3460 holds I still favour extension to 1.3520-30 and potentially 1.3546-56 at least

Resistance: 1.3496 1.3520-30 1.3545-56 1.3576
Support: 1.3461 1.3440-45 1.3413 1.3382-92

MAIN ANALYSIS: I am not 100% comfortable with price at the moment as it appears to be alone in its bullish structure compared to CHF and GBP. However, currently momentum still seems positive and I therefore tend to remain bullish but watching how this develops. The ideal should be for price to break above 1.3496 to reach 1.3520-30 at least. How deep the pullback from this area manages to reach (and I estimate around 1.3496-00) will be important. Assuming the 1.3496-00 area supports I would then look for extension to the 1.3545-55 area and max 1.3576. I'd look for a pullback from there. (Given the uncertainty I'd suggest confirming trades with solid trade set ups.)

COUNTER ANALYSIS: Any earlier break below 1.3461 would break the current bullish structure and return price back lower noting the 1.3440-45 area and yesterday's 1.3413 low. There is also modest support at 1.3382-92 and only below there would provoke deeper losses to 1.3220-25.

MEDIUM TERM ANALYSIS:
29th January: As described in yesterday's video there is a lot of conflict between the Europeans. For the moment we can take this step by step and with the rising 4-hour Price Equilibrium Cloud nudging price from below we should see follow-through to 1.3549-85 at least... possibly 1.3605. However, that should trigger a correction lower. We shall now need the 1.3585-06 area to be broken to see gains extend to the next projection areas at 1.3692-96. The 1.3400-25 area appears supportive while that additional rally can be seen.

A break below 1.3424 directly would undermine the bullish structure sooner and thus signal losses back to the 1.3256-64 lows and potentially 1.3140...

Good trading
Ian Copsey

Another workmanlike day…


On the whole yesterday was close to what I had expected, or at least within the boundaries of the scenarios that were envisaged. Only AUDUSD surprised with its strength and raises some question marks. I’m still quite cautious at this stage, still observing the underlying disconnect within the Europeans although yesterday saw them move in fairly close correlation. Indeed, an observation of momentum suggests that all three are more under the influence of general Dollar bearishness. Both EURUSD and USDCHF have broken clean of their hourly & 4-hour Price Equilibrium Clouds to place a bias on the Dollar downside while momentum itself displays no divergences. As mentioned yesterday the recovery in GBPUSD was slow, initially struggling with the declining hourly Cloud and then the 4-hour Cloud. It is now just poking its head above but there are still key retracement levels just above that could still make the upside a bit tough. However, the Dollar downside does have the upper hand but I’m not sure there’ll be an aggressive follow-through today.

AUDUSD is approaching a modestly strong pivot resistance with and hourly bearish divergence developing. Thus, it seems to confirm the general outlook of limited follow-through.

USDJPY finally broke support and has extended losses and to the barest minimum correction. At this point it is standing in no-mans land, finely balanced between forcing one more dip before rallying and just breaking higher directly. EURJPY appears to be in a similar situation but does seem to need another push higher. Thus, I feel this may well be the more straight-forward pair today with the cross being dragged up behind.

So, today appears to have little room for extended directional moves and thus take care. Best take profits when available as the overall balance of the major pairs is still in a delicate situation…

Good trading
Ian Copsey  

Tuesday, January 29, 2013

WEEKLY OUTLOOK VIDEO FOR THE 21st JANUARY


This video was provided to subscribers of the daily and weekly Forex reports on the 21st January to visually highlight the underlying analysis, not only the Harmonic Elliott Wave count but integrating other analysis to provide a background of the movement that will be required to retain the current wave count and key support and resistance areas that would risk a break in the count. 


Want to see this video at the start of the week? I provide these videos for subscribers to the Harmonic Daily Forecaster and the FX & Metals Weekly Harmonic Analyst. You can sign up for a free trial or contact me for details of special deals on the reports. 


Weekly video for the week of the 21st January



Good trading
Ian Copsey

Limited moves expected today


The European puzzle continues. I am perplexed by the apparent disconnect between all three and particularly with EURUSD where the bullish fractals don’t seem to interconnect. As discussed in yesterday’s video I continue to follow the short-term structures and perhaps these do provide a cautiously Dollar bearish outlook on the day. Indeed, yesterday’s target in GBPUSD was met almost perfectly to suggest a reversal higher while EURUSD seems to have completed a sideways consolidation range and thus should extend gains. The pig in the poke is USDCHF that has taken a lot of time and effort not to make any break in either direction.

Having said that EURUSD and GBPUSD should both strengthen the extent is not clear. Of the two, EURUSD probably has potential for the larger move, the difference being that EURUSD has the 4-hour Price Equilibrium Cloud rising below while in GBPUSD the 4-hour Cloud is still above and declining. If I just stretch that observation to USDCHF price is generally hugging the 4-hour and hourly Price equilibrium Cloud. It just goes to highlight how much the three are disconnected at this point…

Perhaps I should add AUDUSD to this group, itself suffering rather similar to GBPUSD and with the 4-hour Cloud still pushing lower but with hourly momentum displaying a solid bullish divergence. I can’t see too much of a correction here although on the day we could see some positive, but choppy, price development.

On to USDJPY… this is a little bit of a puzzle in itself. There are a few projections from different levels of wave degrees that all implied the 91.25 high. Normally converging fractal targets should therefore generate a reversal. However, these projections were a mixture of only intermediate target projections (thus minor correction) and one projection target that would imply a deeper correction. Yesterday’s 90.56 low (and add a small margin below) marks the pivotal area between extension higher and a deeper correction… I tend to favour a push to a new high but we need some resistance levels broken first…

That leaves EURJPY more probably still pointing higher but I’m not convinced we have that much further to go. There is a hint that possibly the next high could generate a correction lower and maybe… just maybe… a larger correction but that will probably require EURUSD to break down. That’s a little teaser but one that should just be kept in mind so that the surprise will not be too much…

Good trading
Ian Copsey  

Monday, January 28, 2013

DAILY FORECAST FOR GBPUSD


BIAS: This still needs another move lower to the 1.5703 area minimum and probably 1.5640-70

Resistance: 1.5793 1.5826 1.5851 1.5870
Support: 1.5745 1.5715-26 1.5705 1.5658-70

MAIN ANALYSIS: We saw losses as expected but which stalled just above the high end of the 1.5718-38 area. The expected correction then developed holding just 1 point above the upper end of the 1.5800-25 resistance. Thus, I feel we should now see the final leg lower that should extend back to the 1.5745 low and probably 1.5715-26 at least. (also note the 1.5705 area) for a correction of approximately 35 points before heading down to the 1.5703 area minimum (if it wasn't touched earlier) and probably to the 1.5658-70 projection - max 1.5640. Anywhere below 1.5705 begin to observe any bullish reversal indications. 

COUNTER ANALYSIS: Only a break below 1.5600 will trigger stronger losses and then note the 1.5551 projection.

Only an earlier break above 1.5826-51 would turn this directly higher and risk follow-through to the 1.5892 high at least. This could hold for a pullback before it finally breaks above. Then note the 1.5921-55 area.

MEDIUM TERM ANALYSIS:
25th January:  This still seems to be vaguely on track.  Watch the 1.5718-38 area for a modest correction probably remaining below 1.5800-25 before the next leg extends to 1.5640-70 (max 1.5603) but then the potential for a recovery. Only below 1.5600 would resurrect the deeper 1.5551 target.

Only a break back above 1.5925 would allow relief to the downside and we'll have to observe how EURUSD and USDCHF fair...

Good trading
Ian Copsey

The European puzzle


I’m rather struck with the mixed signals that the Europeans are giving. Friday saw EURUSD break above 1.3403 that has signalled further strength. This was not my favoured outlook, well, not at this point, the reason being the apparent stronger bullish implications that appear to be stretching the daily upside targets a bit higher. Indeed, daily momentum looks quite firm. I can see GBPUSD following in its footsteps … but not directly. First, this seems to require a new low… Then comes USDCHF, a magnificent puzzle in itself and aside from the lack of correlation with the Euro that it has displayed over the past week or two. Well, perhaps it’s not quite as big a puzzle than I have thought since if the EURUSD looks stronger than expected, possibly USDCHF could be considered more bearish. That is something that needs to be ratified over the coming week(s).

For today I think we’re going to see a fairly similar development as we saw at the end of last week. The Euro is still in a basic rally should soon be due a correction. As I mentioned above GBPUSD needs to make a new low. Thus, between the two remains a modest level of correlation though not entirely the same. As for USDCHF, well I think we’re going to have to be patient with this one until the Euro has completed its correction…

Equally so, the tumble that AUDUSD has seen over the past few days has not looked positive at all. This still seems to have some minor downside to come but close to a correction higher. Thus today could be a little choppy so take care.

USDJPY, on the other hand, worked like a dream and is developing well. I can see a range today that should make a new low in the current correction but then a new high. With that said, hourly momentum is looking rather stretched and thus be aware of a subsequent deeper correction lower. Now, how this plays through in EURJPY is a little uncertain. I have found this one rather strange and while I can see some very strong wave relationships the issue that is bugging me is the extremity of the larger wave degree projection ratio. So I’d suggest exercising some care with this one today. USDJPY is not going to take it too far and then the key element is how correlated USDJPY and EURUSD will be. However, the final outcome does look like seeing a correction lower in both USDJPY and EURUSD and therefore, depending on which moves first, the potential for a moderate correction lower does seem possible… at some point.

Have a profitable week
Ian Copsey