Monday, September 30, 2013

A bit of a mixed outlook


Friday’s Dollar losses were looking quite good but today’s open has tended to destroy the bearish outlook, at least in some pairs, maybe all. While not showing in the charts there seems to have been some heftier gaps in pre-broker trading that need to be assessed to judge whether everything has broken down. These early gaps, often seen in New Zealand trading can occasionally be “games” played by Kiwi banks that eye institutional stop losses and the chance to profit from them. (Yes, I’ve been caught by those in the past…) The problem, in these situations, is whether we should count them as valid trades that impact on charts and levels, or whether we ignore them. The two that stand out today are EURUSD and USDJPY, both of which have seen those lower prices but have not reverted close to Friday’s close. GBPUSD and USDCHF have reverted and remained stable.

So we have an extra problem to solve today. Have these gaps turned the Dollar around or are they just corrections? Interestingly of the Europeans it is GBPUSD and USDCHF that I feel really must see new Dollar lows. Can that happen? Has EURUSD extended its sideways consolidation that started on the 19th September? Personally I have a preference for Dollar losses. However, perhaps it’s better to approach this by observing first to see whether the Dollar retains the Dollar resistance areas and extends losses…

I do see further weakness in AUDUSD but possibly not by too much and feel a recovery (at least) is possible but until now we have not seen any confirmed reversal lower (in the bigger picture) so it will be worth playing this will some caution.

Even USDJPY gapped much lower. This has disappointed me in that it has complicated the overall bullish structure and may even imply further losses. That is also highlighted in EURJPY which, on the back of both EURUSD and USDJPY gapping lower, is threatening further losses. What is less clear is just how direct these can be. Certainly, momentum in USDJPY is now quite bearish so the bias is definitely on the downside. That EURJPY has broken quite a few supports the risk is also lower and if I look at the daily picture may risk quite a drop – though best wait for confirmation of a break of support.

Thus, we have a difficult start to the week. Best wait for things to settle and the uncertainty to disperse.

Have a profitable week
Ian Copsey  

Sunday, September 29, 2013

TECHNICAL INDICATIONS FROM 27th SEPTEMBER 2013

As usual, here are a few more observations from Friday'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. Price behaviour remains subdued with mixed momentum indications and fairly thin trading. We continue to see price boxed in by daily and 4-hour Clouds which should imply a break out before too long. Dollar momentum remains mixed and daily momentum more on the Dollar bearish side. 

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


Friday, September 27, 2013

DAILY FORECAST FOR EURUSD


BIAS: While difficult to be totally confident, it's now or never for the leg higher to 1.3580 - 1.3636

Resistance: 1.3511-23 1.3548 1.3568 1.3586
Support: 1.3461-71 1.3444 1.3425 1.3400-05

MAIN ANALYSIS: The correction from 1.3537 has been very, very deep which always suggests caution. If the outlook of a move to 1.3636 remains possible then there is only one way to go… Wait for a break above 1.3523-37 and once broken look for follow-through to 1.3568 and while that could provoke a correction we should see extension through 1.3586 and 1.3610-15 to reach 1.3636. Hourly momentum is now irrelevant but 4-hour momentum has potential to deepen its bearish divergence. Thus, ensure solid bearish reversal indications are seen and given the momentum conditions a bearish reversal pattern would be helpful... Be aware of a potential shortfall and thus look for those bearish reversal indications from 1.3580 upwards...

COUNTER ANALYSIS: A break above 1.3665 and 1.3685 would be a lot more bullish and risk follow-through towards the 1.3711 daily high and above.

Directly below 1.3460 and then to 1.3425 & 1.3400-05, then to the 1.3380-00 support. Further lower is the 1.3330-60 support that should hold for a correction higher.

MEDIUM TERM ANALYSIS:
25th September:  The past two days have been rather frustrating. Normally I'd expect any correction to have stalled above yesterday's 1.3464 low. It hasn't broken any "rules" but is more than normal. Therefore I still can't rule out the final 3-legs higher as I have been suggesting to reach the 1.3630-40 area but we are very close to the bullish expectation breaking down. Below 1.3445-53 would signal more direct losses. 
Only above 1.3640-65 would open up stronger gains above 1.3711...

Good trading
Ian Copsey

More work to be done…


We didn’t quite get the day I expected. Against the Europeans the Dollar downside lost its gloss and moving back close to where it started. It also brings us back closer to the critical Dollar resistance levels that would raise a few more uncertainties if broken. The other problem is tat with this week’s lack of direction it is causing shorter term momentum to become ineffective in terms of providing turning signals. 4-hour momentum is slightly better but beginning to feel the impact of this week’s nothingness.

So, I remain cautiously with the immediate Dollar bearish view but shall be looking for firmer evidence from intraday trading to judge whether price develops in the right manner to confirm my preferences. If today is anything like the first 4 days then I’ll curse and swear as I could have taken the week off…

The Aussie started the day looking good but ended without having gotten too far and retraced back closer to the 0.9337 low. It hasn’t broken yet and the recycling still possible. It may be better to wait for confirmation on both sides today to generate a more meaningful follow-through but note that the upside has a very, very tight outcome.

Then, not quite out of the blue but certainly from a few points higher than I had expected, USDJPY rushed higher and is close to confirming some firmer price development. Many consider the daily chart to show a triangle but I have significant doubts about that. It’s an easy interpretation and one that I have had as a second option, but the impulsive structure does look more likely to me. Quite how it proceeds from this point will clear this up. However, it’s a breath away from resuming its rally and should drag EURJPY upwards with it but the cross probably has a more limited upside for the moment – and therefore do consider the implication for EURUSD…

Probably another slow grinding day but I think one that should take us closer to a more directional market.

Have a great weekend
Ian Copsey  

Thursday, September 26, 2013

DAILY FORECAST FOR GBPUSD


BIAS: I suspect a rally to 1.6123-53 initially and after a correction up to 1.6193-01 

Resistance: 1.6094-08 1.6040 1.6123-43 1.6162
Support: 1.6050-58 1.6039 1.6014-19 1.6000

MAIN ANALYSIS: The 1.5954 low held and we have seen constructive gains. However, it does look like a choppy move so take care in the build up. There is resistance around 1.6087-94 - maybe 1.6104 - from where we should see a correction of around 40 points before the rally extends higher towards 1.6123-43 at least but allow for just under the 1.6162 high. From here there should be a correction , probably remaining above 1.6060-80 before we see the second rally to the 1.6193-01 target. 

COUNTER ANALYSIS: A break below 1.6039 and 1.6014-19 will return price to the 1.5954 low - breach triggering losses through 1.5928-32 and lower. 

Only a break above 1.6201 and 1.6250 would maintain gains to 1.6280 and possibly 1.6306-34.

MEDIUM TERM ANALYSIS:
25th September:   While I would like to still look for 1.6201, and it does remain a possible target, we must be mindful of the 1.5932-54 area that, on breach could generate an alternative outcome. Ideally it should be bearish for 1.5825 and 1.5690-1.5720 and thereafter towards the 1.5427 low.

However, I remain mixed given the strong daily momentum and should any deeper correction prompt resumption of gains it will imply a move not only to 1.6201 and we may have to consider higher.

Good trading
Ian Copsey

More of the same?


Anyone would think it was still August. Dull, slow, choppy and lots of noise in the charts. However, after suffering lack of Dollar losses over the first two days of this week (and stretching the extreme limits of a retracement) we have finally seen the Dollar return to weakness. Has this been just a correction? I think probably not but the noise and deep corrections within the structure is making life difficult. So far the moves have been progressive though at all times we need to note the key break levels that may prove me wrong. I do see potential for new lows but I tend to feel that this could be a slow, choppy and painful process.

The key outcome is to note the momentum conditions as we approach the decision of whether this will see losses extend robustly or by a lesser margin. Over the past week, where price has been holding in generally tight ranges, intraday momentum has generated a “reset” so that divergences – or lack of – can provide us with greater clues. With luck we may just see the tipping point either exceeded or avoided by tomorrow or if not, then by Monday. Patience and observance will be key…

Yesterday the Aussie stalled 2 points above a level that would have confirmed direct losses. It’s holding off for now and during this time the risk may well turn higher for today at least. While there is a fine balance between the two outcomes the positive point is that the trading levels are very clear and very precise. (When can you ever say that about traditional Elliott Wave??)

The JPY pairs… USDJPY moved below support to point to more direct losses but has done so with the maximum of trouble. Corrections have been abnormally deep and choppy. Indeed, it looks like we’ll see more of that. This tends to suggest that EURJPY could well spend a particularly flat day so don’t expect too much from the cross. Therefore, prefer a more short term, potentially scalping, approach and take profits when seen…

Good trading
Ian Copsey  

Wednesday, September 25, 2013

TECHNICAL INDICATIONS FROM 24th SEPTEMBER 2013

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. Price behaviour has been subdued with mixed momentum indications and fairly thin trading. In a few case we are seeing price boxed in by daily and 4-hour Clouds which should imply a break out before too long.

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


Time to consider alternatives


The past two days I have been waiting for the Dollar to extend losses. This seems most logical when looking at the Dollar Index and USDCHF daily charts. However, the market has been extremely reluctant to commit to the downside with both EURUSD and USDCHF holding within tight ranges. During this process GBPUSD has deepened more than expected although hasn’t actually done anything to confirm losses. I also wrote yesterday that the market can’t maintain this tight consolidation indefinitely and having maintained this to the full limits that it can we must surely see a resolution today. Please...

While the logical outcome in the Dollar Index and USDCHF is the preferred view the depth of the recovery in the Dollar are so close to limits that we should be aware of breaks of these key levels. Even then, because of the already significant losses we have seen in the Dollar, deeper than I had anticipated when they began, I shall be scanning the structures for clues. It’s quite a complex process since a very much weaker Dollar will have significant implications particularly in GBPUSD that, considering the monthly cycles, would be hard to accept. Anyway, first we need focus on the immediate outcome so do take note of breaks…

AUDUSD made losses as expected but the structure is slightly mixed. Overall it looks more bearish but seems to have lost its way during yesterday’s decline, or at least seems not to have a recognisable impulsive structure. It almost seems as if it could recycle although currently there doesn’t seem to be much evidence from other indicators. This is another case of needing to know which levels will confirm or deny either bullish or bearish scenarios.

Finally the JPY pairs… USDJPY topped out almost point perfect. I can’t say the decline from 99.17 is indicative of further direct losses but momentum does still look bearish. We therefore probably need a little more development to get a better grasp of what will happen with the two scenarios being follow-through lower versus a recycling. EURJPY doesn’t offer much of a clue although yesterday’s low is challenging an area where any break will send it much lower. Again, momentum doesn’t seem to suggest a low being in place and if anything does look more bearish. However, best wait until the key support breaks.

So basically we have some ambiguous situations today that will require our attention to spot when either bullish or bearish scenarios are broken or confirmed. Be aware of these levels to be prepared for the implied outcome.

Good trading
Ian Copsey