Friday, March 29, 2013

BREAK LEVELS AND SUPPORTING A STRATEGY

A forecasting methodology such as Harmonic Elliott Wave is often considered with extreme caution, many critics pointing out that you never know when it will be right or wrong so that trading using it holds greater risks. That approach is naive as it supposes that a user will only use that single technique and not an integrated methodology involving several more supporting tools. However, what is also not understood is how Harmonic Elliott Wave has a stronger and more disciplined structure that can, in many instances, identify when things are breaking down. This video discusses a few of these elements and why a growing number of traders are finding that Harmonic Elliott Wave is providing a missing element to their own trading strategy.



Good trading
Ian Copsey

DAILY FORECAST FOR GBPUSD


BIAS: We should now see a series of rallies & brief corrections…

Resistance: 1.5222-30 1.5247 1.5274 1.5303
Support: 1.5183 1.5166 1.5140-45 1.5120

MAIN ANALYSIS: Price is currently en-route to 1.5222-30 followed by 1.5247 and later 1.5303. Each correction should be no more than 10-25 points. From the 1.5303 projection target the correction could be as much as 30-40 points but overall this should be the pattern of development in steps. This should see a minimum upside target around 1.5389 but could extend a little higher to the 1.5400-40 area. This to should be the final one and from where I feel we shall see the daily downtrend resume.

COUNTER ANALYSIS: Only a break above 1.5475-00 would risk breaking the bearish structure.

MEDIUM TERM ANALYSIS:
27th March: Yikes, that was a much deeper pullback than I had considered. However, the fact that I am expecting EURUSD to recover, USDCHF to correct lower and possibly a total reversal and that we simply have not seen a deep enough daily correction to satisify the relationship with the 1.5992-1.6180 pullback I remain cautiously bullish still and feel that as long as we see no further losses that we should still reach the 1.5346-89 area at least and that higher 1.5430-50 area may well still be seen...

Below 1.5071 would force me to accept direct losses but I suspect then that we'll see a strong swinging and volatile decline to make up for the upside shortfall.

Good trading
Ian

Underlying Dollar weakness should resume


The reversal in the Dollar came as expected, although in EURUSD without a minor new low. There are one or two complications that could occur so I do have some reservations but overall the prospect does seem to point to resumed losses in the Dollar – against the Europeans and Aussie that is. That today is a holiday in many parts of the world does clearly risk consolidation although from what I see this doesn’t look appropriate at this stage of the development. More likely the chances favour a slight deepening of the current correction followed by a resumption of losses.

Perhaps the biggest of my problems is in USDCHF that has covered itself in a cloak of illogical developments that do not seem to fit in with anything much at all. When I add to this the issue of GBPUSD that I feel is in an upward correction the confusion is raised as it would take a totally opposing route to that of EURUSD and USDCHF. Well, GBPUSD is most capable of taking an independent stance and therefore I shall be watching this triangle and given the weirdness in USDCHF also it is something to keep in mind for the coming week or two.

USDJPY… Hmmm… I was rather surprised to see it stall above 93.52 after what appeared to be a valid corrective structure. Having been caught twice looking for the larger rally to develop, I remain cautious. It’s not an impossibility but with EURJPY apparently requiring another low the implication that something, somewhere, has to give. Thus give good attention to what is required for the uptrend to be confirmed as technically this has not yet been seen. Additionally, be aware of what would break the downward sequence in EURJPY because if that happens it would tend to fall in line with a bullish USDJPY. These two are still on the watch list…

I think today should be focusing more on looking for Dollar highs and for the downward move to resume…

Have a great weekend
Ian Copsey  

Thursday, March 28, 2013

I think we’ll start seeing the Dollar weakening by day’s end…


Yesterday was a tough day. EURUSD went basically to plan. Otherwise there were quite a few shifts away from the ideal development – in USDJPY and GBPUSD in particular while the Aussie disappointed with a limp and feeble last leg that triggered the correction lower that I was anticipating … but just earlier than I had thought.

I do still see some potential banana skins as I view EURUSD against USDCHF in the larger picture but for today they should both gain against the Dollar. This seems to still be implied in GBPUSD that dipped far deeper than I had been expecting. Overall it should be moving higher as it has not yet reached the retracement area that needs to be achieved to satisfy a relationship with a prior corrective wave. As I mentioned we do seem on the verge of the Euro reversing back higher. These seem to be very well correlated across the Europeans. My bigger problem that I need to address is the possible conflict in the larger wave degree. However, that is something I will need to address later.

The Aussie can probably be included in the expectation for it to begin to recover but I’d voice some caution there as I’m not sure it will be as direct as the Europeans. The risk of a new low below yesterday’s low does seem quite high.

USDJPY stalled just short of target and proceeded to dip lower. I am aware of the apparent need for EURJPY to decline so we’re going to have to watch to see which one takes it lower. Logically, given my comments on the Euro it would seem as if USDJPY has further losses to be seen. Thus, take care and note the upside break levels for the cross just in case my bearish EURJPY expectation is incorrect…

So it sounds like it could be a little complicated today. Best stick with the Europeans as I feel they have a slightly more stable expectation.

Good trading
Ian Copsey  

Wednesday, March 27, 2013

DAILY FORECAST FOR GBPUSD


BIAS: We still need to allow for 1.5113-28 before the rally resumes

Resistance: 1.5170 1.5190-06 1.5237 1.5259
Support: 1.5134 1.5113 1.5088 1.5070

MAIN ANALYSIS: As suggested yesterday, the decline from 1.5259 has been very deep and has forced a slight re-think. I still remain bullish and I feel the rally could theoretically resume at any time. However, I am aware of the downside risk in EURUSD and feel that we may need to allow for the correction to be even deeper - noting the 1.5113-28 area. As long as that supports we should then see the upside resume above 1.5195 and 1.5210-20 to move back to yesterday's 1.5259 high. This is probably well enough for today but note the 1.5276-87 and 1.5320 minor resistance areas.

COUNTER ANALYSIS: A direct break below 1.5100 would confuse and allow a move below to 1.5070-88 and later the 1.5026-45 area. 

MEDIUM TERM ANALYSIS:
26th March: Yesterday's developments haven't changed the bullishness - yet. However, they may well have made things more bullish to higher retracement levels. While 1.5113-28 supports we should see gains resume and back to yesterday's 1.5259 high but I think the 1.5346-58 area may well provide only a correction only and later see gains reach above 1.5389 to reach 1.5425-50 (approx) before lower again.

Only an earlier break below 1.5100 would raise the risk that we could see direct losses.

Good trading
Ian Copsey

Towards a final move


What a dreadful day. Limited moves, lack of follow-through and a general lacklustre approach to the market. I didn’t have great expectations for yesterday but the market’s reaction was exceptionally underwhelming. That’s the moaning out of the way. It should get a bit better today but I’m not sure it’ll be that much better.

Certainly, as we start the Asian session I can’t see too much change. Business as normal: make a few pips on spreads and wait for Europe to come in. What should happen thereafter is the Dollar making limited gains. I can’t see it being spellbinding and the European pair that stands to move the most is EURUSD. GBPUSD has very little margin on the downside and USDCHF is … well, strange. It basically has an illogical structure on both upside and down and something needs to happen to clarify the situation. It’s probably one to leave aside until it settles.

What I do feel is that once today is over we should see a reversal lower in the Dollar. Beyond that I have to concede that there are several conflicts. The outlook I provided in Sunday’s video pointed to a more logical outcome but Monday’s sudden rush higher in the Dollar has thrown the Europeans into a state of disarray or at least a range of inconsistent outcomes. Thus it’s best to take this step by step.

The Aussie continued to maintain more steady progress and is moving very much in line with expectations. Once this move is complete we should see a deeper correction lower. The question is whether this will happen sooner rather than later…

USDJPY rallied but has found the 4-hour Price Equilibrium Cloud very hard to penetrate. It has been on a long sideways move though gently moving higher that has allowed price to poke its head above the hourly Price Equilibrium Cloud and is now facing the challenge of consolidating its gains so that it can take the next step by breaking above the 4-hour Cloud. I’m not 100% satisfied with the structure so I do have some reservations. Thus, today should be an important test of whether it’s ready to extend gains.

EURJPY went nowhere quickly, rather like EURUSD but given the description of USDJPY the risk is whether the cross can break above resistance or succumb to further losses.

Good trading
Ian Copsey  

Tuesday, March 26, 2013

Time for a resolution of conflicts


Given that I had generated yesterdays report on Sunday the first few hours of the day were pretty much perfect. Excellent, I had thought, popped out for my appointment, came back and completed the U.S. equity report feeling very good with myself and then saw the deep corrections in EURUSD and USDCHF and though “well, they look a bit too deep…" Then when I awoke this morning I saw the end result.

So, as you can imagine I wasn’t a happy bunny. However, the breaks of those early deep corrections were the signals that something else was developing so that was pretty straight-forward to recognise. However, what it has left is a rather scattered array of outlooks - across the Europeans at least. While EURUSD and USDCHF were the bigger movers GBPUSD reacted with an iconic stiff upper lip. While stretching some limits it hasn’t really broken to the downside and does still need a deeper correction higher. Once seen, it should lose out again.

That is where I see conflict. I’m not at all comfortable with EURUSD and USDCHF, particularly the latter that has an inconsistent structure and seems to be pointing to further gains. However, I’m not so convinced that we have much lower to go in EURUSD… and all that with the peculiarity in GBPUSD. Thus, I am going to approach this will a bit more caution and look to see how today’s developments play through.

The Aussie has worked quite well and of all remained pretty much in line with the outlook I have been following for the past week. This should mean a continuing move higher overall but a correction lower is expected before long.

The JPY pairs were always the wild card yesterday but the resistance I pointed out in the weekly video held firm and fast in USDJPY that later triggered losses. Ideally I’d like to call a low here although momentum is hardly shouting out for a reversal higher. Therefore it may be better to have the break higher confirmed with the hourly Price Equilibrium Cloud currently declining. This needs to settle down and move sideways if there is any chance of a reversal.

On the other hand EURJPY has broken the prior bullish structure and does seem to need to break below the 118.72 low before it can reverse higher – if indeed that is the ultimate expectation of which I have slowly had the enthusiasm being whittled away… I’d still prefer to work with USDJPY and EURUSD at this point…

A day that requires caution today.

Good trading
Ian Copsey  

Monday, March 25, 2013

DAILY FORECAST FOR AUDUSD


BIAS: I feel a lot of today could be sideways consolidation

Resistance: 1.0459-72 1.0485 1.0502 1.0523
Support: 1.0418-34 1.0405 1.0388 1.0367

MAIN ANALYSIS: The early correction did stall close to 1.0422 - just 2 points below - and saw a seesaw day up to 1 point below the lower 1.0460 target. I think there's a chance that we may even see 1.0472 but otherwise we'll be due a correction lower again to the 1.0418-34 retracement zone. From here we should then see a rally above 1.0472 and to above 1.0500 - the estimated target around 1.0523-52. From here expect a correction lower.

COUNTER ANALYSIS: Only a break below 1.0400 would concern and risk losses back to Thursday's 1.0362 low and potentially further noting the 1.0342 low.

MEDIUM TERM ANALYSIS:
21st March:  The triangle has provided a higher launching pad for the next leg higher. While acknowledging the 1.0439 area there appears to be a stronger risk of seeing 1.0460-72 for a pullback before heading higher for the broad 1.0525-75 area.  This would generate a deeper correction lower, but still just a correction following which we should see follow-through to a minimum of 1.0670.

Below 1.0350 and then 1.0295-05 and 1.0280 would imply a deeper correction lower. I would still feel that the 1.0199 corrective low may not be broken. 

Good trading
Ian Copsey