Friday, February 27, 2015

The morning after the night before…

AT long last… On the 9th February I suggested that we’d see an intermediate target in EURUSD at 1.1180-1.1201. Nearly three weeks later it has finally achieved my forecast. However, I would have liked to not have that gawping great consolidation in the middle… The final upward correction from 1.1288 sealed the bearish fate, having failed to provide constructive foundation for an impulsive move higher.

That said, this move has inflicted damage elsewhere and now needs some adjustments to repair these developments. Firstly, USDCHF looks as if it has shaken off the shock of the 17.5% collapse in terms of now actually beginning to correlate - in direction, rather than degree. Its break above the 0.9534 high does suggest further gains. However, my forecast in GBPUSD went well awry, breaking below the key support – that then implied losses. This still needs some care, but I fancy that we’ll see a correction higher at the very least and I wouldn’t rule out new highs… It will need to be handled with kid gloves though…

Thankfully the Aussie went very well, holding just 4 points below my ideal support to then trigger a new high. The subsequent reversal following the 0.7912 high was only to be expected. In the larger picture it is in a halfway house. It could go higher… it could go lower. No doubting from the daily chart that there has been no confirmed reversal of the downtrend. Watch the next break.

And with a groan, USDJPY failed to move lower. I can’t see a valid bullish impulsive structure so I don’t want to get too bullish – but there is a risk of a move above 118.93… Beyond that, I’d like to take a second look. However, even the gains it made did not stop EURJPY from jumping off a cliff. There’s probably no doubt it will go lower, but the question is when. Now - or after a deeper correction? I fancy the latter.

Have a great weekend
Ian Copsey  


Thursday, February 26, 2015

DAILY FORECAST FOR GBPUSD

INTRADAY CHART
BIAS: While 1.5498-05 supports we should see gains above 1.5533 to 1.5545-56 en route 1.5570-80 (approx)

Resistance: 1.5533 1.5545-56 1.5570-80 1.5600-15
Support: 1.5498-05 1.5482 1.5466 1.5445

MAIN ANALYSIS: The break above 1.5480 has seen progress to the 1.5535-40 resistance mentioned yesterday. We should now see the 1.5498-05 area hold any correction to see the rally resume towards 1.5545-56 for a correction of around 20 points (approx) and then higher towards the 1.5570-80 area (max 1.5600-15.) This should see a correction lower.

COUNTER ANALYSIS: Thus, any earlier direct break below 1.5490would confuse. However, note the 1.5466-82 area as possible support. Below 1.5460 would look a lot more bearish.

MEDIUM TERM ANALYSIS:
26th February:  Gains have resumed and have potential to 1.5570-80 for a correction before heading up to the 1.5642-60 area at least - possibly even 1.5687. This would still be an intermediate projection target so following a correction there will be a higher high - potentially to the top of the daily consolidation range around 1.5700-50.

Only back below 1.5466 would take this back into range

Good trading
Ian Copsey

Subterranean rumbles

The market appears to have received a course of beans, wholegrain, fruit and vegetables – enough to begin to sense some movement in the bowels of the Forex pairs. GBPUSD broke higher as warned; USDCHF made a minor breach of a key swing low; AUDUSD followed through higher and EURUSD? Ok, it’s still in range but even the gains it has seen, along with the structure, suggests that some deep rumbling is setting the foundation for a release of the 3-week old blockage.

The next challenge to judge will be the aggression, or lack thereof, on the follow-through. It seems to me that it will be a little more orderly than we have seen in the past months. I also see potential for more divergence in direction within the Europeans in particular. However, before making that a definite statement, it will be better to judge once it has happened. When I look at the development in GBPUSD and AUDUSD, I can’t see much chance of an aggressive follow-through. USDCHF seems to likely follow-suit though it remains with an extremely noisy and ragged development.

If I have any thoughts on style of trading, I’d suggest following the main direction but take profits early and then re-enter on a pullback. Key will be to recognising those points.

The JPY pairs moved. Not that far, and mostly sideways. Certainly EURJPY looks like continuing its lazy meandering development, potentially continuing the sideways range before dropping lower. This tends to fit in with USDJPY that has gone into slow motion, although the main direction does appear bearish. It seems to me that there is not a lot of enthusiasm about USDJPY due to the one-month old consolidation. Therefore, expect price to drift rather than shake the world.

It seems like another somnambulistic session unless some catalyst comes to rouse us from our slumber.

Good trading
Ian Copsey  


Wednesday, February 25, 2015

The border guards are watching

The extremes of ranges have remained patrolled by border guards. So far, the have been able to repel any attempt by the market to escape because of a climate of uncertainty. However, I’m not sure they can contain the frustration that must surely be felt by the prisoners of bore-dom. Can the market make up yet another twist, wrinkle or tweak that could still maintain the range trading? I am running out of ways to contain the structures in a manner that would retain the range. That said, we have to wait and see. When it does break it should generate a decent follow-through.

GBPUSD may well be a pair that could break the range independently. It’s still not confirmed at this point and I’d rather, due to yesterday’s messy & complicated decline, prefer to remain patient and wait for it to come. EURUSD does have a couple of options but the space available to provide an alternative outcome is very slim. I wouldn’t rule it out, but merely point out that the market still retains options on both bullish and bearish sides.

The Aussie was just a complete mess yesterday. The drop down to 0.7739 and recovery hasn’t really provided any clarification of the structure. I’d suggest refraining from risking any large position on this unless there is a clear catalyst…

The JPY pairs… well, USDJPY caught me out like a kipper but did stall in the alternative resistance area. This should imply a clearer outlook now – at least to the next downside target. It will be from the next low that we have to watch how any recovery develops. Given that EURJPY took the opportunity to make a neutral statement was tedious, but does still work within the expectations I suggested yesterday. Unfortunately, that tends to suggest that EURUSD will remain in range…

Patience still required…

Good trading
Ian Copsey  



Tuesday, February 24, 2015

WEEKLY OUTLOOK FOR SILVER

INTRADAY CHART
24th February:

The Wave iii was a little stronger than expected, reaching the  Wave c  to reach the 238.2% projection at 16.08. From there a correction back to 16.59 has been seen - being a 33.3% retracement in Wave iv. Allow for the 38.2% at 16.68. This should now seea move lower in Wave v to the Wave [iii] targets. With the Wave iii deeper the Wave v must reach the 15.92 area at least - that's the 238.2% projection. I suspect this may hold, but allow for the 261.8% projection at 15.69. 


With Wave [ii] being 69.5% the Wave [iv] should be around 14.6% - 23.6% before heading down in Wave [v] towards the 15.00-20 area (+/-). This should form Wave -a- and see a correction in Wave -b-.

Good trading
Ian Copsey

Breakout gets closer

Complex, erratic consolidations… These seem to be the case in five out of the six currency pairs I follow. However, there is a limit to the collective corrected phases seen within these types of complex patterns – thank goodness – and it looks as if the end is much closer now. Indeed, it is likely to be today based on the structures I see, and perhaps also because Greece is now sending its list of reforms over the next 24 hours. I’m tempted to voice my opinion on the direction but given the twists and turns, intertwining, convoluting, confounding and tangled structures, it is probably better to maintain the status quo until the there is a “yay” or “nay” uttered from the EU committee.

This should maintain the excruciating sideways consolidation that has plagued us for over three weeks. Having said that, we can watch the last legs of the consolidation to ensure that it develops as “planned.” By confirming alternatives it should provide a stronger idea of what will happen next – basically, is this a bullish or bearish corrective structure?

The only currency pair that has not seen consolidation is USDCHF – for which I suggested the potential for a correction higher. It was deeper than I had wanted, but in this position there is no obvious retracement level. I tend to favour losses today but there is no absolute clear outcome which behoves us to still exercise due care.

Another dull day – at least until there is an announcement. Then let out the frustration.

Good trading
Ian Copsey  


Monday, February 23, 2015

The saga continues…

That’s now 3 weeks that EURUSD has managed to remain in a range. The hope that perhaps it would break on Friday proved to be a false hope, the decline stalling above the range low at 1.1261-69. This development does appear to have swung the pendulum towards the upside but I’d still be cautious until there is a clean break.

Within the other two Europeans, we saw a new high in USDCHF – something hat I had not wanted but had pointed out the positive 4-hour momentum which could still risk gains. The losses from 0.9534 formed an Outside Reversal Bar. These can suggest deeper losses but I don’t find this reversal indication particularly consistent. They can trigger a total reversal but also sometimes just a temporary correction. It does suit my expectation but there is a certain degree of doubt. Indeed, if it follows through, the target is very clear.

In GBPUSD, the decline developed initially as expected but failed in terms of hitting require projection targets. There’s mini-minor chance it could be resurrected but there are other alternatives that have arisen and, because of the failed projection targets, potentially bullish. The same can be said of AUDUSD although I find this has an exceptionally horrid structure in which I see many possible obstacles. It will still need some caution until a stronger structure can be established.

The JPY pairs also extended their complicated structures. Just as it looked as if USDJPY could succeed on the downside, it whipped back higher to take us back into complicated territory. It has the look of a possible number of sideways complex consolidation patterns that suggests more defensive trading until there is a stronger winner amongst the possibilities. In EURJPY, these options appear to be fewer and perhaps the combination of USDJPY, EURUSD and EURJPY could provide an indicator for the next larger moves.

Sadly, it’s not a day for establishing trending moves but more a defensive day waiting for clarity to develop.

Have a profitable week
Ian Copsey