Wednesday, April 30, 2014

Back on the straight and narrow… soon…

I can’t say yesterday went wholly to plan but it did provide some critical information that should make the coming days a lot easier. This covers all the Dollar-currency pairs and provides a lot more clarity to the individual structures. Having said that I see potential for the day to start on a rather messy note that could see some tight consolidation, minor breaches and reversals. However, by the end of the day I feel the more straightforward element will begin to come into play. The good news is that the Europeans do all seem to be batting for the same team following yesterday’s developments all seem to point to the same outcome. That outcome should be a more sustainable move in the Dollar…

AUDUSD stalled half a point above my key support and is making good progress on the upside. There’s still a little further to go but once that high is in place – and like yesterday, as long as this follows the path I think it should – we should have a more definable end result that should provide a solid entry target. Follow the analysis here to confirm the move develops as expected to confirm the validity…

USDJPY rallied nicely and back to 5 points above the previous high. There’s probably a little way to go but still keeping within the target area I mentioned yesterday. Once again, like AUDUSD, as long as this develops to plan we should have a solid entry range with tight stop available to us. We could do with a little help from momentum that is still slightly ambiguous but let’s consider that once the target area is achieved.

Finally in EURJPY the rally stalled below the ideal target and at a lower resistance area. This is not necessarily a bad thing and indeed, could well be good because this lower target did not confirm an impulsive target. Thus we know that an alternative outlook is developing. This should help us, in conjunction with the EURUSD and USDJPY outlooks, to understand the limitations for the cross.

Thus, keep heads low during the first half of the day, potentially with the exception of AUDUSD, but later in the day watch for the entry ranges that should be reached…

Good trading
Ian Copsey  



Tuesday, April 29, 2014

DAILY FORECAST FOR EURUSD

INTRADAY CHART
BIAS: Risk is for possible consolidation (triangle) but note potential bearish reversal indications from 1.3880 onwards

MAIN ANALYSIS: The break higher came as a surprise but interestingly this is developing at the same time as GBPUSD should find a high and USDCHF a low. Therefore I worked back through the structure here and feel that there is an argument to look for a retracement area around 1.3870 - 1.3905. If this is approached look for bearish reversal indications for a reversal back down to the 1.3839 low ...

COUNTER ANALYSIS: Directly below 1.3838 would risk more direct losses...

Above 1.3905 and 1.3930 would retest the 1.3966 high and extend gains to 1.3983 and following a deeper correction back higher again.

MEDIUM TERM ANALYSIS:
29th April:  I had a third look at the structure, surprised by yesterday's direct rally and confused by the apparent dissconnect with USDCHF and GBPUSD, both of which are meeting with Dollar lows. I can see an alternative that would tend to suggest a peak between 1.3870 - 1.3905. If this is approached look for bearish reversal indications for a reversal back down to the 1.3839 low ... We should then see more sustainable losses.
Only above 1.3905 would risk follow-through to 1.3958-64, and later to 1.3983.

Good trading
Ian Copsey


Twists and turns

The day started out mildly Dollar bullish, but lasted much shorter than I had anticipated, to spark a sharp reversal to the downside instead. This was an outcome of which I warned in the report and also video outlook, although again I hadn’t expected such an immediate move. I had preferred the initial Dollar bullish view mainly because it would have provided a more balanced pullback from where Dollar losses could potentially be balanced across the Europeans. Thus, yesterday’s result has generated a more uncertain outlook due to the generally differing outlooks.

Therefore I continue to take a cautious approach and note a potential alternative. This still has some potential complications so the preference is to work to identify possible Dollar bullish reversal indications. This is probably the most obvious in USDCHF that has a very clear structure while EURUSD and GBPUSD have several shades of grey quite evident. Therefore there is a need to understand the break levels.

Indeed, even AUDUSD took a step yesterday that tends to push the directional sway to the downside. Even then I would suggest some due care & attention with the shorter term structure providing the basis for some intermediate (but relatively minor) swings before the apparent bearish break is established.

Where we did see a positive day was in USDJPY that rallied nicely, dragging EURJPY higher also. However, in USDJPY we have not exceeded the 102.72 high and I feel this still needs to be seen. This leaves the position in EURJPY a little up in the air, but only in the short-term and could take us to the targets I have been suggesting for the past week.

In summary, I do feel that we are possibly seeing a culmination of individual developments that should soon generate a more directional move.

Good trading
Ian Copsey  



Monday, April 28, 2014

Further twists in the tale?

Indeed, an indifferent end to the week that kept all currency pairs limited to relatively tight ranges. It does beg the question of when this introspective trading will finally come to an end. Actually, I feel quite soon. I’m not sure today will be that day but there doesn’t seem to be much more room to accommodate the current corrective pattern.

Certainly we continue to retain a cautious approach and while short term, more scalping type trades are favoured, the process should be to confirm a possible outcome within the consolidation and should it develop a breakout will be highlighted. I suspect that today could well see some more Dollar bullish developments. This does seem implied from USDCHF and potentially EURUSD. In GBPUSD the sideways meandering and lack of new highs could still keep the development more defensive. Therefore even this pair could be susceptible to Dollar strength…

AUDUSD has been flirting with key support but for the past day and a half has made some progress – but not enough to suggest it has confirmed either the upside or downside. The next break should set the tone for the coming week and maybe longer.

USDJPY has also been flirting with both upside and downside limits without making any defined break. It has remained in a relatively tight range for almost two weeks and needs to make a decision soon also. There’s one scenario that could suggest it could happen today… but equally there’s a scenario where it could extend the status quo for another day or two. However, the important issue is to understand when it makes the break and the implications. EURJPY is even more indifferent having dipped back lower on Friday but still in an area where it can still make decisions in either direction.

Thus, it should be another cagey day but I suspect overall with Dollar offering a mildly bullish outcome.

Have a profitable week
Ian Copsey  



Friday, April 25, 2014

DAILY FORECAST FOR USDJPY

INTRADAY CHART
BIAS: Ideally this should now rally to the 102.90-103.01 area before reversing lower

Resistance: 102.38 102.54-64 102.80-83 102.98-01
Support: 102.00-08 101.86 101.65 101.20-30

MAIN ANALYSIS: The alternative bullish outlook developed - a drop below 102.30 and down to 102.00-08 was seen. While this area continues to support we should see gains back above 102.38 and towards the 102.80-83 area (be flexible around here depending on how deep any correction from 102.38 is) but eventually to the 102.90-01 area. Ensure bearish reversal indications are present. From here we should see losses. 

COUNTER ANALYSIS: Any direct break above 103.03 would see price rally to the 103.24-52 area but then see a minor correction (25-40 points approx) before heading higher to the 104.12-33 area. This should cap for a reversal lower.

A break below 101.86 would look a lot more bearish.

MEDIUM TERM ANALYSIS:
24th April:  I'm growing less attracted to the more bullish outcome following yesterday's losses. I could still accept a move to the 103.01 area but only a clear break above there would provide any basis for stronger gains. More likely, once the 102.89-103.01 area is achieved and with bearish reversal indications I can see more risk of losses back to 101.86 and then the 100.34-61 area at least.

Good trading
Ian Copsey

A ragged end to a ragged week

Complex consolidations in the hourly charts can be so very frustrating. Complex corrections in the daily charts are a nightmare to behold and I’m beginning to feel there is a chance that we’re seeing the early stages of the latter. In some ways, if this happens, it does provide a sign. The mere fact that we haven’t seen more sustainable losses in EURUSD is a concern given the position of the daily chart. Of course we have to take USDCHF and GBPUSD into consideration. These two don’t appear to have the same ability to sustain a daily consolidation, or at least, not for too long.

Thus, at this point, with the complexity of the consolidation we are seeing, there naturally comes a multitude of alternatives (a natural characteristic of a complex correction) and thus the ability to cover all the alternatives is extremely difficult to deal with. Therefore, while this condition persists the advice is to either spot short-term opportunities or leave well alone. If there is no definite signal the risk of losses is much higher. Today there are chances of breaks of range but I’d still suggest taking care as minor follow-through and whips back are quite possible, just as we have seen on many occasions this week.

I feel USDJPY has the greater chance of a directional move although I don’t see this as being robust. However, if I have this right I do feel that a stronger directional move could develop early next week. Clearly this will have impact on EURJPY which itself has deteriorated into a self-indulgent consolidation of self-pity but the break may not come until early next week also.

Today continued care is required. Short term trades with quick profits remain favoured.

Have a great weekend
Ian Copsey  


Thursday, April 24, 2014

DAILY FORECAST FOR AUDUSD

BIAS: We need the 0.9255-67 area to remain supportive and for gains to push back above 0.9320…

Resistance: 0.9312-20 0.9340-45 0.9361 0.9377
Support: 0.9278 0.9255 0.9225-35 0.9205

MAIN ANALYSIS: Losses came sharply but remained above the deeper 0.9255 retracement level. There is still a minor risk of seeing 0.9255 but with a shallow inverse head & shoulders we should see some gains and probably trigger a firmer rally. To confirm this we shall need a break above the 0.9320 area. It won't rule out corrections so take care. However, overall we should now see more positive progress back above 0.9340-45 and 0.9361 to approach the 0.9377-90 area...

COUNTER ANALYSIS: Only below 0.9250 would confuse and risk a move back towards the 0.9205 low…

MEDIUM TERM ANALYSIS:
21st April:  The strength seen just before I left was a big surprise and suggests a recycling back to the 0.9756 high. This will require the 0.9255 - 0.9295 area to support for gains back above 0.9460 to reach 0.9520 at least within a larger rally.

Any earlier break below 0.9255 and 0.9205 would risk a longer term irregular consolidation but overall weakness.

Good trading
Ian Copsey