Friday, November 28, 2014

DAILY FORECAST FOR AUDUSD

INTRADAY CHART
BIAS: This should be quite bearish but there is not enough information to determine targets yet

Resistance: 0.8528-35 0.8557 0.8576-80 0.8594
Support: 0.8509 0.8479 0.8454 0.8429

MAIN ANALYSIS: Price took the alternative route of a direct move down to the 0.8458-73 area. From there it rallied to 0.8614 which appears to have completed the correction and therefore we should be in a decline that has potential to be quite persistent. Already we have seen losses to 0.8509 and it would be long before it retests the 0.8479 low. The problem I have is that the structure is not exactly clear and therefore the depth of any correction is unknown. However, the overall downside target is at 0.7569 and therefore I suggest observing for bearish reversal indications and looking to take advantage of the downside. Given EURUSD and GBPUSD are bearish keep following the downside.

COUNTER ANALYSIS: Only a break back above 0.8576-80 would concern although the ultimate break is above yesterday's 0.8614-21 area. Only then would I expect a deeper correction to 0.9641-65 before lower.

MEDIUM TERM ANALYSIS:
28th November: I remain with the minimum daily target being much lower… It looks like the 0.8614 high has provided the corrective high and therefore the break below the 0.8479 low should see follow-through and I suspect quite persistent losses…

Good trading
Ian Copsey 

The Dollar looks more perky

Wednesday proved to be a difficult day but saw the Dollar extend to the support levels I provided hold in EURUSD and USDCHF. From there yesterday saw the Dollar begin to make further gains. The third European, GBPUSD, pushed higher too which has forced a rethink on the structure from 1.6184 but looks as if it has been resolved. While there is a small risk of some early indecision, overall the renewed strength in the Dollar seems to have more bullish intent. All three Europeans have reversed through their own hourly Price Equilibrium Clouds to test the 4-hour Clouds and this is the next requirement to extend the new direction.

The same can be said of AUDUSD. Wednesday saw the broad support area I suggested to see a correction higher. Here, too, it appears to be complete and has broken below the hourly Price Equilibrium Cloud but has yet to make a firmer test of the 4-hour Cloud. Once this has been seen we should have a decent chance of it joining the Europeans.

That just leaves the JPY pairs, both of which have had me whipped around a bit with a rather strange structure. In particular USDJPY is a position where it could move in either direction. We’re going to have to watch both pairs because the structure in EURJPY is one that could spark a stronger move in the direction of the break. That it could be influenced more by EURUSD could have an impact on USDJPY also. Therefore, it’s going to need some care and attention to work with breaks to judge the direction. Do remember though, that USDJPY can resume the uptrend at any time.

The Europeans and Aussie look to have the more definite structures and are therefore probably the better route.

Have a great weekend
Ian Copsey  


Wednesday, November 26, 2014

The market appears indecisive

Well the corrections in the Europeans completed… but then decided to add another corrective pattern on top. This has made things just a bit more complicated, not so much that this is happening but there are some conflicts now arising with GBPUSD and potentially AUDUSD – although the latter followed its own route independently anyway. This tends to suggest that we need see some further divergence between the Continental Europeans versus GBPUSD – or the latter will trigger a far more complicated outlook. There should be room for GBPUSD and EURUSD to deviate slightly but the entire situation does appear to have a rather delicate balance that could easily break down. I’d suggest that care be taken in this group and to place positions only when fully satisfied by a range of inputs.

Of those above, perhaps AUDUSD has the greater leeway for continuing on its own path. That could well maintain a certain degree of correlation with the Europeans but it will be well to understand the boundaries – both upside and downside – that could tell us more about the next development. I’d also point out that there is potential for an hourly bullish divergence but at the same time 4-hour momentum is trying to dig a hole in which it wants to furrow…

While EURJPY developed quite well although the expected correction much deeper than expected. This raises another discussion about boundaries and the need for understanding where the current outlook is confirmed … or breaks. The reason I mention this is because of the upside failure in USDJPY. This does need to accelerate quickly to avoid the potential for a minor new corrective low. However, the structure that appears to be the most logical suggests a very strong projection to the first leg higher and I’m cautious that we could be getting too far ahead of ourselves. If the rally does make new highs we’ll have to deal with it. However, until then, perhaps some attention is required so control exposure risk until there is a more definite break.

Today could be as mixed as yesterday…

The next update will be on Friday.

Good trading & Happy Thanksgiving for tomorrow… 

Ian Copsey  


Tuesday, November 25, 2014

DAILY FORECAST FOR GBPUSD

INTRADAY CHART
BIAS: Cautiously, while 1.5720-23 caps we should see losses resume

Resistance: 1.5720-23 1.5736-40 1.5775-80 1.5796-05
Support: 1.5692 1.5670 1.5640-45 1.5619-25

MAIN ANALYSIS: We didn't see the triangle consolidation but a more ragged development that has pushed up to 1.5714 but should see one final push into the 1.5714-23 area. Ideally, this should come when EURUSD tops out. This suggests direct losses back below 1.5692 to see losses extend through 1.5670 & 1.5640-45 to 1.5619-25 initially and later 1.5572-88. This should see a correction of around 25-35 points (approx) before losses extend below 1.5572 to the (estimated) 1.5540-50 area. We should see a deeper correction higher from there.

COUNTER ANALYSIS: Only a break above 1.5750 would surprise and risk gains through 1.5775-80 and back to the 1.5796-05 and 1.5824-34 areas. However, then take care and at all times note momentum for signs of a bearish reversal.

Only a break below 1.5500 would risk losses extending to 1.5444…

MEDIUM TERM ANALYSIS:
17th November: We have seen a more direct decline. However, we are approaching the next higher degree target at 1.5509-43. This target should provoke a relatively deep correction before it can continue on its way lower.

Only back above 1.5800 area will whip us back higher...

Good trading
Ian Copsey

Completing corrections?

Broadly, the basic outlook for a corrective day yesterday has worked out well. Of course, the biggest problem in the majority of corrections is just how deep they will dig – and that is what faces us today. Already we have seen AUDUSD continue its losses and the recovery in EURJPY was quite encouraging. However, across the board there is room for some sneakiness that will not only need some attention but understanding where stop losses should be placed.

From the Europeans, the development in GBPUSD has been the most unusual, the normal structures that tend to develop failing in turn. It has ended up either as an extremely unusual irregular hybrid or there could be an alternative that I had considered, but find it rather incongruous.  For the Continentals there appears to be straightforward choice of resuming Dollar gains after this move – or we’ll see another set of corrective waves before the Dollar gains.

Of all, perhaps AUDUSD performed the best, finding a corrective high and followed by deeper losses. The directness of the decline from the 0.8700 high has made it a little difficult to be certain of having identified the right structure but does look as if it should continue to see losses, but more likely in a less direct manner and more frequent corrections.

Finally, the puzzle in USDJPY & EURJPY may well have been solved. Certainly, both reversed higher and look good. Still, there is an element of uncertainty but given the market’s general reluctance to hold any short positions – no doubt provoked by the plethora of calls for a major reversal lower just a few weeks ago – we should still remain alert for signs of a confirmed extension on the upside. Indeed, as mentioned yesterday, EURJPY was facing a critical support which has held. Therefore, focus more on upside development. However, perhaps this won’t develop in such a frenetic manner as before.

Best vehicle? Potentially USDJPY and followed by EURUSD if the downside is confirmed…

Good trading
Ian Copsey  


Monday, November 24, 2014

Surprising end to the week…

I thought all was developing well in terms of the correction lower in the Dollar before I laid my head to rest on Friday evening. Therefore, you can imagine my amazement when I saw the Dollar strength which I had not even dreamt of during my slumber. The reasoning behind my expectation for my call for a deeper correction lower in the Dollar was down to the Wave -c-. Probably 90% (or more) of Wave -c- projections are 85.4% or more. The Dollar low we saw in EURUSD implies a mere 61.8%-70% projection - quite a rare event...

However, we have some work to do before these targets are seen and it’s not going to be a one-way affair. Indeed, I doubt we’ll see a strong follow-through today. This is certainly reflected in EURUSD and USDCHF. That GBPUSD didn’t react as strongly to the other two Europeans is not too much of a problem. The general structure of the needs for all three, are basically the same but GBPUSD has a different structure to the other two. It could even maintain the sideways consolidation.

The Aussie, from this point, is beginning to suggest a more independent development to the Europeans. Yes, there is risk of consolidation but even this suggests some weakness today. It will be well to take care and note the structure in order to try and confirm which route it will take.

As for the JPY pairs, it was a tale of two currency pairs… USDJPY edged a little lower while EURJPY decided to dip more than its toe into the decline. That has made life a little more difficult in the cross and it may well be useful to hold off from holding an excessive position until USDJPY lets us know its intentions. It is in a correction but one that has a relatively large range given it’s correcting a rather large rally – but one which is paired with an earlier deep correction. Rather than playing around with the downside it’ll be better to observe for signs of bullish life stirring again. That will also be the trigger for EURJPY…

Nothing really stands out as a clear winner today. There is potential, but patience will be required to ensure the entry is at the right point…

Have a profitable week
Ian Copsey  


Friday, November 21, 2014

DAILY FORECAST FOR USDJPY

INTRADAY CHART
BIAS: There should be a correction higher - maybe consolidation - before losses resume

Resistance: 118.20-25 118.47 118.73 118.97
Support: 117.73 117.40-50 117.05-22 116.85

MAIN ANALYSIS: After two days of exceptionally direct gains we should have found an intermediate high at the top of the lower 118.73-96 projection range advised yesterday. The first reversal has been seen and should now see a correction higher courtesy of the rising 4-hour Price Equilibrium Cloud. How deep this will be and in which corrective structure is now the important issue. I suspect this correction shouldn't be too lengthy because the automatic first reversal target hasn't yet been seen - this being down at 115.45-116.00. For now watch the 118.47-118.73 range. Allow for a possible expanded flat complex correction that should remain above 117.39. 

COUNTER ANALYSIS: A break below 117.39 would extend losses down through 117.05-22 and probably down towards the 116.00-05 area. The 115.45-75 area is also possible. 

Only a break above 118.97 would see a minor follow-through to 119.43. There is a higher projection target at 119.86-120.08 but I think this is getting too high... 

MEDIUM TERM ANALYSIS:
21st November:  It looks like the 118.73-96 has done the trick and should new see a relatively brief correction. This could be restricted to the 115.45-116.00 area but we'll need to observe the lower degree structure to confirm this. Any lower than 115.45-75 could see losses to below 115.00 and at most 113.60 - 85. Once this has been seen the next rally should develop once the daily Price Equilibrium Cloud rallies to push higher.

It'll take quite a drop to reverse this uptrend - the 113.60 area is probably where I'd place the line - but there is a deeper 111.50 retracement although it would be very unusual. 

Good trading
Ian Copsey