Tuesday, September 30, 2014

Monkey snared?

A pretty dull day was exactly what I had expected, and what we saw. In these final stages price development has resorted to rather introverted contortions that have been difficult to identify due to the sketchy noise from the lower degrees. There’s an argument to suggest that we have seen the Dollar highs, but equally there has been no confirmation, so there remains a need to be prudent and acknowledge the limits that would suggest whether we’ll see one more high or see the reversal resume.

In the Europeans, price is flirting with both the hourly and 4-hour Price Equilibrium Clouds – the 4-hour still marginally rising (Dollar-wise) but now with little momentum. 4-hour momentum has begun to provide Dollar bearish divergences while hourly momentum remains swinging from extreme to extreme. Therefore, we still need to be on our guard but the prospect of finding resolution does appear to be much more imminent now.

In AUDUSD we saw a stronger drop than I had expected for this position but where one wave has generated a stronger extension it can just mean that the next will be more stubby. Thus, looking across the range of pairs (excluding USDJPY but including the Dollar Index) we have a similar outlook for the medium term which encourages me. These should later come back into correlation but it seems as if USDJPY has its own agenda but which tends to make JPY crosses quite attractive…

Indeed, looking at USDJPY the development has been close to perfect, yesterday’s high being a little higher than expected but also the anticipated correction. However, I don’t see an out-and-out rally at this point so I’m not expecting rabid gains. However, it should, along with EURUSD, provide a base foundation for EURJPY to make some upward progress. It is still in the early foundation stages and therefore still subject to potential swings. Therefore, make plans now and we should see a beneficial outcome over the next week or three…

Today still contains some risk but just be aware of initial barriers and still the chance of cautious development.

Good trading
Ian Copsey  



WEEKLY OUTLOOK FOR AUDUSD

DAILY CHART
DAILY ANALYSIS:


We have either seen the low in Wave EF^D or we have one more dip to around 0.8659. This should then require the final 3-wave move in Wave EF^E before stronger losses develop...


INTRADAY ANALYSIS:

We need to take a bit of care here. The ideal target is at 0.8659 but it's a bit too obvious so I feel we need to react carefully. The current correction in (cyan) Wave iv appesrs to have a limit around the 33.3%-38.2% retracement at 0.8751-61 and from there this has to meet the 261.8% projection in (purple) Wave iii at 0.8672. From there, we should see another correction - as low as 23.6% but could be as much as 38.2%. It will require a stubby 33.3% (approx) Wave v to stall exactly at 0.8659 but give leeway eitehr side...

We're still seeing 4-hour momentum in the process of developing a bullish divergence and hourly needs to catch up also. Thus, take care in these final stages. Once the low is in place we should expect a recovery back to the prior Wave -b-...

Good trading
Ian Copsey

Monday, September 29, 2014

DAILY FORECAST FOR USDCHF

INTRADAY CHART
BIAS: Initial range trading between 0.9499-30 should give way to a follow-through to 0.9538-51

Resistance: 0.9523-30 0.9538 0.9548-51 0.9569
Support: 0.9508 0.9499 0.9483 0.9474

MAIN ANALYSIS: No break below 0.9455 and instead further gains. Thus, we still have a little more upside to go. Initially we should see a cap at 0.9523-30 that should see a correction back to the 0.9499-08 area. From here expect gains to develop back to 0.9523-30 and to 0.9538 minimum and possibly 0.9548-51. There is a higher target at 0.9569 but I'm not convinced it has the legs to reach there. Thus, we need observe momentum as this higher area is approached - or for bearish reversal patterns if bearish divergences do not develop...

COUNTER ANALYSIS: Only back above 0.9550 would see gains to 0.9569 and even as high as 0.9584-0.9598 although I'm really not comfortable with this extent.

Below 0.9490 would raise the risk that we have seen the high. Next stop would be around 0.9455-74. Below should then confirm the larger reversal.

MEDIUM TERM ANALYSIS:
29th September:  Momentum is still bullish and the only thing we can do is keeping observing around the expectation of a cap developing between 0.9538-51 - noting 0.9569... and at an extreme 0.9598-0.9615... Once the high is confirmed the first reversal should be down to the broad 0.9340 - 0.9410 range.

Only above 0.9615 would concern greatly. I can offer other higher targets but this would conflict with the higher degree waves. There's another projection at 0.9633 - so let's see what today brings first.

Good trading
Ian Copsey

Softly, softly, catchee monkey

Some stalling points can be simple – clear and obvious and work like a dream. Others seem to engineer the most convoluted and perverse contortions. Having mentioned this it’s obvious that it’s the latter we’re going through. In terms of the outcome across all currency pairs I analyse, the result and subsequent reactions in terms of depth within the daily is very consistent. However, for now we have to navigate the hurdles that are being thrust in front of our face.

Dollar momentum remains really quite bullish, which is confounding me, and with that in place it makes the prospect of a suggesting a Dollar top difficult to judge at this point. As we start the week I can see risk of limited range trading and it will be the nature of this consolidation that may (or may not…) provide more information about momentum. The daily Price Equilibrium Clouds remain Dollar bullish in the Continental Europeans, USDJPY and AUDUSD. It’s only GBPUSD that is showing any signs of bucking that trend. The 4-hour Price Equilibrium Clouds are also Dollar bullish, but perhaps decelerating while the hourly Clouds are seeing greater volatility around price. So this is a situation that needs to be assessed as the week starts.

If there is any currency pair that concerns, in terms of my expectations, then it’s GBPUSD that has struggled to make any further upside impact. It does still have a cushion that can act as a catch-all. That it appears to match with how I feel the Continental Europeans should develop is constructive but this issue over momentum does raise some dark clouds that suggest we need to remain alert.

So, all round, I can’t see excessive moves today unless some stronger catalyst suddenly develops. Trade carefully and err on the side of taking profits quickly.

Have a profitable week
Ian Copsey  


Friday, September 26, 2014

Not particularly convincing…

The buck did stop – a little stronger than expected but within reasonable margins for this position in EURUSD and USDCHF. I could argue the Dollar highs are in place. Even GBPUSD made a minor new low which was required. So in terms of price, the required outcome has been completed. The thing that bothers me is that on the one hand there are minor hourly bearish divergences while on the other 4-hour momentum remains bullish. On the third hand both EURUSD and USDCHF have solid (Dollar) bearish divergences. Thus we have a battle between price and momentum. 

Very clearly, we’re going to need some constructive follow-through to confirm the reversal else there could be a risk of yesterday’s Dollar gains following-through. GBPUSD is in a different position and, while there are deeper retracement support levels, there is a stronger probability that it has already found its low.

Where there is an apparent disconnect is in AUDUSD. While I had been rather mixed, the downside limits were reached but there’s no strong reversal indication. I do expect a correction higher, at least, but I’m not convinced we have seen the final low here… Thus, there is still room for some swings before finding a base.

I was mixed in USDJPY yesterday but the break of the identified key supports provided the catalyst and there still seems some way to go. Where the bigger puzzle lays is in EURJPY. I had begun to think that we had seen the low  - and we wouldn’t see the original downside targets. In the end the structure became more complicated and actually saw a low just below my support. It is unusually deep, but in this cross, possible. This has put me into a difficult position in terms of the underlying momentum of USDJPY losses and EURUSD gains and the respective impact on the cross. It does seem like a very fragile situation and as such, it will be better to wait until the situation is clarified…

Have a great weekend
Ian Copsey  


Thursday, September 25, 2014

The buck stops here…

EURUSD and USDCHF performed magnificently yesterday, almost point perfect and perhaps there is a chance they could be spot on. From this point forward the development is going to be important. We’re due a correction to yesterday’s gains – probably not excessively deep for the position they are in – but do have a modestly wide range in which they can stall and extend the Dollar upside. In turn, the depth of the correction will help determine the most likely stalling point for the Dollar upside. This is a position where the follow-through could be minor, or could be moderately strong. Thus, a great deal of attention to momentum studies and any signals you normally look for will be critical.

As for how GBPUSD will fair is less obvious. It has been flapping about in the broad band of neutrality and hasn’t really made any clear break. I’d much prefer it to extend losses again now – not dramatically deep – but holding within the range I have been suggesting. The shocker will be a direct rally but I’d really find the structure hard to decipher… Thus, best wait until it has made its first moves that should confirm its intent.

The Aussie moved higher – not a surprise – but I still think it has another leg lower to go. This suggests a two-way day and certainly no home runs again.

The JPY pairs are going to need some attention. EURJPY has done enough on the downside – although slightly lower could be possible. From here it has a risk of remaining in a range. This now needs to fit in with the expectations in both EURUSD and USDJPY and could even allow USDJPY to extend higher. However, I suspect this wouldn’t be a direct rally – or if it is then possibly the expectation of the cross remaining in a range could be dashed. This triangle needs some attention.

Patience is required today, and observation too…

Good trading
Ian Copsey  


Wednesday, September 24, 2014

DAILY FORECAST FOR EURUSD

INTRADAY CHART
BIAS: We should see losses resume to 1.2771-84 initially - and later 1.2744-57

Resistance:1.2863-661.28791.29001.2925-30
Support:1.2825-351.2806-121.2771-841.2744-57

MAIN ANALYSIS: The correction reached the 1.2891-02 area and has reversed as expected. We should now see losses resume although while the 1.2835-40 area supports there is a mild risk of a recycling to the 1.2863-66 area before losses resume. However, overall we should now see losses extend to 1.2806-12 en route the 1.2771-84 area for a correction. This has a broad area that could be seen  but I feel around 35-55 points approx from where the final leg lower to the 1.2744-57 minimum target appears most likely. We shall still need to keep in mind the lower 1.2708 area also. Note hourly, 4-hour and daily momentum for bullish divergences as the target low is approached.

COUNTER ANALYSIS: Only a direct break back above 1.2875 and 1.2902 would risk follow-through above 1.2930 and 1.2960 to retest the 1.2994 high. This should hold on first test - breach will trigger stronger gains. 

MEDIUM TERM OUTLOOK:
18th September:  The final daily corrective high was seen at 1.2994 and this implies losses to 1.2744-57 at least - at most 1.2700-10. Thus, as this area is approached, note momentum conditions and the potential for a reversal higher in what should be a much deeper correction.

Only below 1.2700 would extend losses to 1.2758-75 at least - but we'll have to judge through momentum conditions to judge the potential low.

Good trading
Ian Copsey

Back to Dollar gains

Yesterday saw the pause in the Europeans as expected, reaching the areas I suggested in EURUSD and USDCHF. This should keep the Dollar maintaining its slow grind higher over today and potentially into tomorrow also. Considering the rather rapid and aggressive bullishness over the past few weeks this slow-motion development is rather frustrating but is clearly controlled by the Dollar bullish daily Price Equilibrium Clouds.

GBPUSD has its own agenda but has recently returned to a semblance of correlation with the Continentals. This currency is a rather a duel edged sword at the moment, meandering (sometimes sharply meandering…) within a large open area where it can run and play without making any commitment to either side. However, from what I see, I suspect the general correlation with the Continentals will continue because I can’t see a particularly constructive development from the 1.6284 low.

The Aussie did what I call an “overlap” which basically happens when a structure can be considered a 5-wave move but then morphs into a larger degree structure. Thus, we saw a different development to expectations yesterday but which does seem to limit the downside today. In the larger picture it promises an interesting outcome. It has a 4-hour bullish divergence and potential for an hourly to develop also…

USDJPY broke below the 108.59 low as expected but not by too much. The move higher from the 108.25 low has been modestly deep but I do consider this a correction. While EURUSD can help EURJPY move down to its target, I don’t think it can do that without the help of USDJPY. Thus, at some point today we should see losses across all three currency pairs.

Steady trading expected. I don’t expect great excitement nor home runs.

Good trading
Ian Copsey