Thursday, July 31, 2014

DAILY FORECAST FOR GBPUSD

INTRADAY CHART
BIAS: While 1.6927-32 caps we should see further losses to 1.6844-72 - take care

Resistance: 1.6927-32 1.6954 1.6965-75 1.6993
Support: 1.6905 1.6888 1.6872 1.6844-57

MAIN ANALYSIS: Losses did move down to the 1.6923-30 projection zone but the very shallow correction option developed and quickly losses extended into the 1.6880-95 support. There is no hourly bullish divergence but a 4-hour divergence appears to be developing. This should ideally see the 1.6927-32 area cap for losses to extend to 1.6872 minimum and more likely towards the 1.6844-57 area. (Max 1.6828.) We shall need hourly momentum to have generated a bullish divergence and for the 4-hour bullish divergence to have strengthened to provide a basis for a correction higher.

COUNTER ANALYSIS: Only below 1.6820 would see losses extend ...

We'll need a break above 1.6954 to suggest the potential for a low having been seen and for further gains to develop to 1.6965-75 at least - possibly 1.6993….

MEDIUM TERM ANALYSIS:
31st July: Losses have continued and with no real evidence of a reversal set up appearing there is risk of yet another drop. This should have a maximum downside at 1.6828 but could stall just above at 1.6844-57. As long as this develops we should see a correction higher. Being in one of those corrections that can be deep or shallow we shall have to see how this develops. Equally, the depth will provide information for the potential downside projection areas.

Good trading
Ian Copsey

An unconvincing outcome

I began the day thinking that, perhaps, we’d see a new high in the Dollar with classic Dollar bearish divergences and all would be well with the world. Well yes, we did see a new high, stretching to higher projection targets but did those bearish divergences solidify. Oh no… Well, the 4-hour are “sort-of” intact but not as convincing as two days ago while the hourly bearish divergences disappeared into the ether. Time to scratch my head and make sense out of this. Certainly, I don’t want to put my neck on the line at this stage without clear-cut reversal indications. There have been instances where the hourly divergence just fails. However, I’m not going to rely on that which will mean some hard work ahead in terms of confirming any reversal.

While the above applies specifically to EURUSD and USDCHF, it’s European adjunct, GBPUSD has not met its downside target yet. This may well be a clue for the Continentals. Once GBPUSD completes this next leg it will be due a correction higher. This is somewhat similar to its Commonwealth partner, AUDUSD that broke supports to confirm direct losses. This Antipodean is in a similar position but probably in a more advanced fractal than GBPUSD. Even then, I suspect these two could develop in similar ways.

USDJPY… oh… I had been patient in attempting to ensure that we’d get the high I had been expecting but just like the Continental Europeans, as this target was approached both 4-hour & hourly momentum abruptly turned up and stood aside to allow price to burst higher. It turns out that in one area (101.93) that was particularly complicated there was a 14.6% retracement… that was it… Hence the rush higher came out of the blue, except for the lack of divergences, and confirms the 24 and 48-week cycle lows that I pointed out 3 weeks ago… Right now we should be seeing a correction before it extends its rally.

Clearly EURJPY was propelled into orbit on the back of USDJPY. This has tended to confuse my expectations for the cross although in the current moves it does still look bullish. For now I’ll rest with that and note the individual development of EURUSD and USDJPY to judge how the cross will fair. A correction lower does appear to be required but like USDJPY it should move higher…

Good trading
Ian Copsey  


Wednesday, July 30, 2014

A pivotal day

Yesterday was a day like any other day. We had similar development, similar slow but steady gains in the Dollar that hit some interesting targets in some currencies, not in others. I am encouraged by that development. I’m not sure I’m expecting much to happen today – or at least for the first half and maybe two-thirds of the day. I’m pretty sure it’ll resemble the type of progression that we have seen for the past two weeks. However, there are some much stronger indications that are developing with some critical highs/lows that must be watched with care.

We still have the 4-hour Price Equilibrium Clouds supporting the Dollar and, quite interestingly, currently floating in the areas where those critical highs/lows exist. These are where the balance between bullish & bearish will be judged and stronger reactions can develop. These will be highlighted in each relevant currency pair, so take note of the implications of breach or failure.


The above covers the Europeans in general but could be applied to USDJPY also. It developed almost point perfect although stalled at a projection level below the one I had expected but frankly doesn’t make that much of a difference. The outcome should remain as expected http://harmonicelliottwave.blogspot.jp/2014/07/daily-forecast-for-usdjpy.html. It has just taken a long, long time to reach its target – 12 days to be precise…

This doesn’t leave EURJPY in a particularly clear picture. It has been developing in perfect three’s since the 137.24 high but it’s that initial “three” that provides the uncertainty, a factor that can allow several structures to develop. Therefore, the respective development in EURUSD and USDJPY will have to be observed to clarify the overall intentions.

The Aussie frustrated by making yet another new low but I do feel this one will have the impact I had suggested yesterday. The problem with this expected recovery is that the depth of the recovery has a degree of uncertainty. It’ll need to be watched with keen eyes to spot where it’ll stall…

Another day, potentially a pivotal one, but one that promises to start like any other day – with limited moves.

Good trading
Ian Copsey  


Tuesday, July 29, 2014

The tortoise and the hare

Sitting down before writing the report, providing some (I hope) useful comments that will enable some idea of my thoughts on what can happen has normally been relatively straight-forward. At times recently, it has been tough to add very much because the progress has been so deathly and boringly slow that it’s difficult to provide any additional constructive guidance. Yep, yesterday was one of those days… It does remind me of the tortoise and the hare when the hare, ahead by miles, decides to have a sleep which allowed the tortoise to win. This market is a bit like that. It would be so easy to slip into a comatose state during which a moment of classic market panic develops and all is missed.

Yesterday’s action was just like that… except it was possible to have a good 20 hours of sleep and not miss a thing…

If there is anything I can add to yesterday’s comments then it’s about the price Equilibrium Clouds. Yesterday’s neutrality has allowed price now to trade around the hourly Clouds and for the 4-hour Clouds to approach and begin to envelope current price action. There are no clear hourly Dollar bearish divergences and actually, even 4-hour bearish divergences are coming under threat. I don’t like this development and it will mean that we’re going to need a machine that provides a gentle electric shock every time we nod off and have a sleep…

At least the Aussie recovered from my support area and seems to be on track. Still, I’m not sure we should be expecting any fireworks and more likely to see some rather slow, choppy gains.

Even USDJPY appears to be developing a sideways consolidation but, as of now, there are no clear reversal signals. However, it’ll be well to understand when it breaks key levels.

Patience required again.

Good trading
Ian Copsey  


Monday, July 28, 2014

DAILY FORECAST FOR EURUSD

INTRADAY CHART
BIAS: Take care between 1.3373-1.3400…

Resistance: 1.3444-48 1.3455-60 1.3484-95 1.3512
Support: 1.3421 1.3400 1.3373 1.3345-50

MAIN ANALYSIS: Already we have a solid 4-hour bullish divergence along with daily. Price has reached the higher 1.3422 target but a bullish divergence is not present as yet. Thus, from this point we need take care. The next (favoured) target is at 1.3397-00. There is a third at 1.3373. Thus, much depends on how this last leg lower develops and with hourly momentum pointing lower it would be helpful if the first part of the day saw some sideways drifting/consolidation before heading down to the 1.3400 area. Still allow for 1.3373.

COUNTER ANALYSIS: A direct break below 1.3370 will risk losses to the 1.3325-50 area - but not below 1.3295.

A direct beak above 1.3450 would suggest a low is in place to extend gains to 1.3484-95 initially. Above there should take us back to just under 1.3548. In turn that will need to break to reach the 1.3570-90 area.

MEDIUM TERM ANALYSIS:
25th July: Yesterday's direct losses now suggest targets between 1.3422-32 minimum and note the 1.3398 and 1.3373 projection targets. We must see an hourly bullish divergence to join the daily and 4-hour. With this low in place we should see a modest correction higher - though the depth is going to be difficult to judge.

A direct break below 1.3370 will risk losses to the 1.3325-50 area - but not below 1.3295.

Good trading
Ian Copsey

Still some work to be done

I’m finding this deathly, dull and slow development quite frustrating. It’s like being a kid waiting for Christmas but the days and hours and minutes all seem to get longer exponentially so that it feels like the day will never come. Dare I say that it’s getting closer – could be reached very soon, but there’s always the chance you could be dreaming and wake up having seen yet another correction and thus have to wait for a while longer…

I do think we’re going to see some greater swings, perhaps not directly, but the evidence appears to be building for the Dollar to reverse back lower, particularly in the Continental Europeans and USDJPY. Apart from Harmonic Elliott Wave there are other supporting indications with Dollar bearish divergences in the 4-hour chart, potentially in the daily charts. It has been hourly momentum that has been the thorn in the side, providing false promises of Dollar bearish divergences, then turning on a Euro/Franc and gloating with a “nyah, nyah – tricked you!” I don’t think this is going to happen immediately but with the 4-hour Price Equilibrium Clouds beginning to flatten out just above/below price (EUR/CHF respectively) the potential is there.

The Aussie reached its downside target but I’m not totally convinced that we’re seen the low. It could be a tricky day and even if we get a correction higher this pair has the ability to see either very shallow or very deep corrections in this position. At this stage of the structure it will be better to reduce position size, even square out and wait for the next move…

The JPY pairs behaved appropriately… USDJPY is now pushing the upside limits and has the potential to make this a long, drawn out affair that could look like a consolidation but with an upward bias. I don’t think we should be looking for massive gains and more to looking for reasons why it could reverse lower. From this, and the comments on EURUSD, the outcome for EURJPY seems doomed to stay in a tight range. What will decide the next direction will be the comparative reactions in EURUSD and USDJPY as they reach their targets…

Have a profitable week
Ian Copsey