Monday, June 30, 2014

DAILY FORECAST FOR USDJPY

INTRADAY CHART
BIAS: While 101.48-50 caps we should see losses to 101.26 and later 100.92

Resistance: 101.48 101.61 101.74-87 102.10-16
Support: 101.26-30 101.10-22 100.92 100.75

MAIN ANALYSIS: I have worked through the earlier structures and, in the short term follow-through at least, we have some initial targets at 101.26 and later 100.92 that need watching. Quite how this develops and how this impacts on momentum will provide clues. The corrective high at 101.47 needs to hold (within  few points) for a slow progression to 101.26 but only for a correction of between 10-20 points before extending losses to 100.92. This should provoke a deeper correction of between 40-60 points. It is from this corrective high that will determine whether the 100.76-82 area breaks... 

COUNTER ANALYSIS: A direct break above 101.61 would risk further gains to 101.74-87 and then 102.10-16.

A direct break below 100.75 would see follow-through to 100.58 - take care there also for a correction of 45-65 points (approx) before further losses resume to 100.23 at least...

MEDIUM TERM ANALYSIS:
27th June:  The upside has failed and we are now faced with two scenarios:
- either we're seeing a deeper daily correction that would still remain above 100.75-82, or;
- breach of 100.75 would open the risk for losses to reach 100.23 minimum.
The only possible complication could be a recycling to 102.35-45 before these tests lower are seen... and note the ideal 24 week cycle low around 3 weeks time (but allow a margin either side.)

Good trading
Ian Copsey

Closer to normality?

Another day that may well have appeared normal, but when absorbing the development into an entire structure, only extends the complications. From this respect, specifically referring to EURUSD and USDCHF there are two possible outcomes (assuming the messy development from the 20th June) that could occur to resolve this next section of development. Both appear to be Dollar bullish, both with different degrees of follow-through. However, before getting to that point the first reactions seen on open could provide a clue. This will be the initial focus.

The alternative, direct follow-through lower in the Dollar would suggest more directional follow-through but would destroy my basic analysis since the June 5th Dollar highs. So, one way or another, today could begin to provide a little more clarity to the coming week and probably beyond.

The Aussie has an hourly bearish divergence but at this point, the king of divergence breaking has yet to state its intent. Equally, the early stages of the day will be crucial. However, either way the outcome will be a lot clearer and should make life a little easier in terms of expectations. Clearly the 0.9444-60 highs are quite crucial.

USDJPY saw further losses, breaking the bullish divergence and now with bearish momentum. As we hover just above the daily corrective lows at 100.75-82 we shall need to retain a degree of patience. Again, the early moves this morning will provide some clues and it will be the strength of the follow-through that should provide more insight. It is at a fragile stage in terms of the next larger move and I’m not sure the outcome will be resolved for a few days. In EURJPY I can still see downside more likely, so going back to the initial comments above, the degree of the follow-through (whichever direction) in EURUSD will be crucial.

I have my preferences but at this point there is no clear-cut evidence of whether I am right. Hopefully the next few days will bring more clarity.

Have a profitable week
Ian Copsey  


Friday, June 27, 2014

An explosion of complications

Subtitled: Why take the easy route when the painful one is more scenic?

As this week began I rally thought we’d achieve the anticipated targets by today at the very latest. I’m not sure whether it’s down to the market’s Sat Nav having suffered a terminal failure or plain self-flagellation. It certainly doesn’t generate a “feel-good” sense of confidence but more appropriate is a growing trauma of what happens next and is there an alternative I have missed?

In these circumstances it is best to generate alternatives, note where the alternatives confirm one scenario or fails to imply the alternative. These break levels, certainly across the Europeans, are mini ranges rather than a specific level so care is undoubtedly required. At this point I feel the main risk is a recycling and thus will point out where this scenario makes or breaks in each. I’d point out that the Dollar Index actually reached the target I set last week but I can’t say it was quite in the manner/structure that I’d expected. It will be worth keeping an eye out on this in a hope that it may provide a better perspective.

AUDUSD appears to have slowed as it contemplates the possibility of breaking above 0.9444-60 but knowing that if it fails we may well see price slump once again. General technical indications are fairly balanced/neutral and it may require a price pattern to determine the next larger break…

Even USDJPY broke below 101.60.I spent a good part of an hour, maybe longer, trying to clarify the decline from 105.43 to 100.82. This had me poring over the 5-minute charts from there but there were too many awkward areas, straight lines that hide the structure and inconclusive projection ratios. I have several thoughts about this, one input being a pretty reliable 24-week cycle low due over the next 2-3 weeks. At this stage the recovery we have seen from yesterday’s low is inconclusive and it’ll be best to note options. I could point to EURJPY as a possible indication for USDJPY but then the (expected) recycling in EURUSD may well provide the catalyst for this…

It may be best to miss today and have a 3-day weekend…

Have a great weekend
Ian Copsey  


Thursday, June 26, 2014

DAILY FORECAST FOR USDCHF

INTRADAY CHART
BIAS: Expect losses but overall choppy

Resistance: 0.8930 0.8945 0.8957 0.8974-82
Support: 0.8904 0.8890 0.8878 0.8864

MAIN ANALYSIS: Overall we did see losses but still in a pretty erratic manner - and this looks like continuing. I feel the 0.8930 area should cap for losses to move down to a marginal new low at 0.8904 for a minor correction and then to 0.8890 at least and I suspect 0.8878. From here look for a correction of some 20-25 points before lower again.

COUNTER ANALYSIS: If we see a second pullback to the 0.8974-90 area, this should also cap for losses to the 0.8878-97 area.

Only a break above 0.8945 would risk a move back towards the 0.8974-82 area before the downside resumes.

MEDIUM TERM ANALYSIS:
23rd June:  While the development has been a bit more volatile than expected, as long as we now see losses back to 1.3547 and below, we should be looking for extension to 0.8878-97 and 0.8853-64 at least… possibly even now towards 0.8834-40. Watch for bullish reversal indications as price approaches these lower areas.

Any earlier break above 0.8988 would risk a retest of the 0.9012 and 0.9036 highs... 

Good trading
Ian Copsey

Painful progress

The market is still trying to drive from London down to Brighton but seems intent on taking a route via Edinburgh. Of course, en route to Edinburgh, the market is going via Cornwall and East Anglia to reach the Scottish city before returning down south to Brighton.

The structures are developing not only agonisingly slowly but with whips and consolidations that are painfully difficult to analyse. However, while I had my doubts yesterday, it seems that we are on that circuitous route and one that looks like it will remain developing in the most convoluted manner that it can possibly muster. I really do feel the market could do with a long session with a psychiatrist…

The result of the above blurb? Just to say that we can expect more of the same. We either have to sit through countless swings in each direction and wait until the targets have been met or best sit out to avoid stops being hit. However, the good news is that my original outlook (in terms of intermediate projections) are still valid.

The Aussie corrected… but then pushed above resistance. It implies one of two things but for now the risk remains higher. Whether this will push back above 0.9437-60 or not, will be the key outcome. Even if it does make that break I don’t think it’ll happen today…

USDJPY … it’s motto is “why take the direct route when there’s opportunity to visit Edinburgh…” Having said that, the 101.60 low remains intact. Indeed, this is the line between bullish & bearish. What we really need now is more solid gains to break above a key swing high. However, in this current market there’s always a risk of sluggish momentum to keep us in limbo for a while. This certainly looks possible from the expectations in EURJPY. I am expecting another drop at some point… but I think that point is a little way above current levels. This tends to point to continued limited development in both USDJPY and EURUSD…

Good luck today. Try and remain awake…

Good trading
Ian Copsey  


Wednesday, June 25, 2014

Consistently inconsistent indications

The inconsistent development across the wave degrees I discussed yesterday in the Continental Europeans extended to double up the strangeness. I think I’ve worked out what’s happening but there is still potential for further twists in the tale. I certainly think these two are best avoided until those consistent inconsistencies are resolved – and I don’t think that will happen today. It’s certainly making their respective structures mighty cumbersome and blobby but when viewing with what’s happening in GBPUSD it does seem to be slotting into place.

In GBPUSD itself, the 1.7062 high appears to have been a shortfall against the 1.7070 target. Therefore, we should be in the correction lower. This should imply a confluence of targets in the Dollar upside but do be aware that the risk of continued whippiness is very high across all three Europeans.

AUDUSD broke support and leaves us in a twilight zone, balanced between support and the 0.9460 high. The break of either end of this range will determine the next move. Even then, depending on the outcome there could still be some corrections and possibly complications. Thus, in either direction, the will be opportunities to take advantage of the next move.

USDJPY pulled itself together and rustled up a decent rally but still hasn’t confirmed further strength. This must be done today else we’ll end up back in consolidation … or at worst a more bearish outlook that would confound me. At this point I’m more on the upside but we’ll need that confirmation I mentioned yesterday.

This has provided a lift for EURJPY that does still look like making further upside progress. This could be fuelled by EURUSD but of course the break higher in USDJPY would be more sustainable. I’d feel a lot more comfortable with that outcome. Even then, the general development I see in the cross does suggest rather strong swings so we’re going to have to remain cautious, noting the balance between the expected outcome in the cross versus the individual pairs.

A lot of care needed today in the Europeans and Aussie. I feel that with the right development USDJPY could be the better vehicle.

Good trading
Ian Copsey