Friday, May 29, 2015

DAILY FORECAST FOR EURUSD

INTRADAY CHART
BIAS: Observe for bearish reversal indications

Resistance: 1.0972-80 1.1000-13 1.1035-40 1.1065-70
Support: 1.0920-25 1.0885-90 1.0866 1.0839

MAIN ANALYSIS: Price has reached the 1.0930-65 area - and just above. It will be prudent to allow for 1.1000-13. However, I feel the reversal back to the downside is imminent and therefore watch carefully for signs of a reversal. I note that the prior bullish divergence (support) line has broken and while there is a "type of" bearish divergence in the hourly chart, it's not a clean reversal indication. Once the reversal has been seen, the initial losses should move back below 1.0920-25 and then the 1.0866 low to confirm the downside that should later extend to the 1.0818 low and beyond. However, do note that we shall need to observe the lower degree foundation waves in the process.

COUNTER ANALYSIS: A break above 1.1020 would risk breaking the immediate bearish development. Then note the 1.1065-70 resistance… and only above there extends the upside.

MEDIUM TERM ANALYSIS:
29th May:   From the 1.0818 low we are approaching key resistance areas between 1.0972-1.1000-13 from where I feel we shall see losses resume - and should make their way down to the 1.0818 low initially.

Only above 1.1075 and 1.1208 would confuse and require a review...

Good trading
Ian Copsey

How will the week end?

As expected, yesterday saw a slow day with limited ranges and lacklustre energy in the market. It’s Friday and as we run into the weekend, how will the week end? We’ve now seen around three days of limited daily ranges and if the market can’t muster enough enthusiasm then perhaps the range trading will extend into the end of the week’s trading. There aren’t many clear-cut indications at this point and therefore, like it or not, we’ll have to keep our eyes peeled.

In general, considering the Continental Europeans, price has managed to poke its head towards the Dollar downside. Momentum is low but given the limited development, hasn’t really taken the bears by the … err … snout. It therefore suggests a certain balance between the bears’ snouts and the bulls’ horns. Therefore, the comment above for the requirement for attention to be paid today is once again implied.

GBPUSD has been doing its own thing… and slowly. The structure has been pretty complex and I don’t really expect any change from that. Compared to the 5.65% decline in EURUSD, the Pound has been more restrained decline of 3.5%. The question is whether EURUSD can meet its downside targets without the Pound breaking below 1.5089… Stiff upper lips chaps!

The Aussie did particularly well to reach the 0.7672 projection target (and another 2 points) where we had the puzzle of shallow versus deep correction. It chose the former. Therefore it remains in a downward move and it’s now more a matter of how deep any correction will be before losses extend.

As for USDJPY, I was a little surprised with the upper target being hit – or within a few pips – but overall it has performed well. This poses another puzzle in terms of the depth of this correction. I think this must be viewed from the perspective of EURJPY also that broke above resistance. Which drives the cross? EUR or JPY? Yesterday it was a combination but probably with EUR being more dominant. I suspect this pattern will continue.

Keep awareness levels high today.

Have a great weekend
Ian Copsey  


Thursday, May 28, 2015

Still expect limited trading

Indeed, my mixed feelings I described yesterday came to pass. There was an oddball of structures that didn’t quite seem to align with indicators which generated a mixture of some good calls and some wayward. It looks like there’s a stronger correlation across the major pairs today but having said that, I can’t see that we’re going to see a clear directional move. The risks for further Dollar gains will always be there, and more it’s a matter of depth of corrections lower. We are at a stage where the projection ratios for the next section of the impulsive wave have variable retracement targets and they needn’t be too deep. Therefore, we’re going to have to be particularly observant to identify when the Dollar continues its rally.

Indeed, the 4-hour Price Equilibrium Clouds are hovering close to price - while at the same time the Dollar has already cleanly pulled away from the daily Clouds. This is applicable to the two Continental Europeans and the Aussie.

In GBPUSD it appears to be wandering through the countryside enjoying the twittering birds and the greenery, lost in its own world without a care in the world. In terms of structure, there is a sense of a bottoming with momentum indicators beginning to display signs of bullish divergences. While the Continentals are promising the opposite, it may well to be mindful of where the line in the chart is that would turn this round.

The break above 123.43-55 was enough to confirm the upside. I have to admit, when trying to resolve the structure from 118.32 I still – even in retrospect – find the bullish structure very difficult to follow. However, at this stage we’re fast approaching key targets. It should lead to a correction first, so basically matching expectations in the Europeans. Indeed, it needs to see a correction now to ensure that yesterday’s 135.01 high in EURJPY does not break (or by only a small margin.)

As for the Aussie… it’s walkabout has been rather haphazard but really quite close to a projection target. The development has been slow and steady and I suspect this will remain the same until the next correction has been seen… Thus, while we should see additional losses they shouldn’t be too excessive from this point. 

Good trading
Ian Copsey  



Wednesday, May 27, 2015

Mixed feelings

Overall it was a good day yesterday, basically Dollar bullish as expected and reflected in all Dollar-Currency pairs. It was only EURJPY that spoiled the party. After having analysed the range of currency pairs I have been left scratching my head. No, I don’t have an infestation of nits. In particular it is USDCHF which puzzles because of the limited nature of the rally compared to the expected outcome. It’s possible that I’ve missed a beat, but overall this should be performing more strongly than we have seen. I therefore have an inkling that we should be watching the 4-hour Price Equilibrium Clouds that could provide support or resistance depending on the currency pair.

In all this, GBPUSD has been a bit of a mess, but basically bearish and yesterday saw a move close to one of its targets. I suspect some Dollar weakness but I’m not sure we’ll see this being excessive – and that tends to concur with my thoughts on the Price Equilibrium Clouds.

Equally, the Aussie did well to extend losses but has, in the process, begun to forget about normal Wave iv retracements. This clouds the picture somewhat and therefore requires some due care and attention, utilising momentum and/or other indicators to guide the way.

As expected, USDJPY made solid gains – slightly stronger than expected – although within the normal boundaries for this position. I see an hourly bearish divergence but no 4-hour bearish divergence. Normally, this would suggest a correction only. Having said that, it has reached within points of a key barrier and therefore we’ll need to exercise caution in this next move. That EURJPY has little upside room spare after its deeper than expected recovery but should continue its decline. The question is whether EURUSD or USDJPY provides the driving force… or may be both. I do find some conflict in this threesome so this is yet another area to watch with care.

Good trading
Ian Copsey  


Tuesday, May 26, 2015

WEEKLY OUTLOOK FOR GBPUSD

INTRADAY CHART
26th May:

We should be seeing a double zigzag at least. The (purple) Wave v could reach close to the gap high at 1.5357 - and allow for a small margin below. 

Now, what happens next is important. A double zigzag would allow a resumption of gains. However, to confirm that we'll see direct gains we actually need to see a break above the 1.5699-07 highs. If so, then we'll be looking for a 5-wave rally in Wave [c]. The target is not really known until we see the initial development but take note of the Wave (ii) retracement areas.


However, with EUR and CHF losing out against the Dollar, it's not impossible to see a triple three in Wave [b]. Thus, take care until the 1.5699-07 area is overcome. 

Good trading
Ian Copsey

There’s potential…

The Dollar correction ended abruptly on Friday and saw some solid gains once more. The depth of the correction in that position has many choices but I was actually quite surprised with the relative shallow nature – that included EURUSD, USDCHF, USDJPY and to a certain extent in AUDUSD. So, after minor breach of the 4-hour Price Equilibrium Clouds, the Dollar decided that it would prefer just to extend its gains.

Yesterday’s U.S. holiday was enough for the market to basically take the day off. The problem we now face is two-fold: first, low liquidity tends to (and has) produce a messy structure that can cause complications; and second, how deep could any correction retrace. I do have some problems with this but which should be resolved over today. What I do feel possible is the potential for shallow corrections so focus more on the Dollar upside.

The sooner-then-expected resumption of the Dollar gains actually helped GBPUSD that came perilously close to breaking above 1.5706. Further losses did seem to be implied – but it’s never that comforting to see a retracement almost hit the prior corrective high. The downside is still expected but take care in the early part of the day.

As mentioned above, USDJPY also decided to cut short its holiday and rejected the bear in favour of the bull. This seems to be more-or-less correlated with the Europeans but probably with EURUSD being the stronger of the two – which should maintain the downside in EURJPY. ‘Steady’ is probably the word to use for USDJPY while EURUSD has more potential for a firmer move.

Thus, expected EURJPY to extend losses although there are a series of supports that need to be challenged which will imply a more volatile decline.

Have a profitable week
Ian Copsey  


Friday, May 22, 2015

DAILY FORECAST FOR USDJPY

INTRADAY CHART
BIAS: We should be seeing continued drifting sideways and then lower

Resistance: 121.10-20 121.47 121.64-84 122.02
Support: 120.73-90 120.50 120.28 119.90-00

MAIN ANALYSIS: No new highs and a break of 120.90 which has confirmed the top. This has generated a sideways consolidation and may well continue between 120.90-121.15 before losses can break below 120.84 to test the 120.73 low and probably below. Be aware that this could be a slow process and potentially choppy. Overall, I suspect a minimum target around 120.28 but see a support area around 119.74-00. I suspect this could hold but will need to be judged when reached. Below 119.74 is the 119.50-55 support. As this moves lower continue to observe for bullish reversal indications.

COUNTER ANALYSIS: Only a break above 121.47 would see gains extend to the 122.02 high at least.

MEDIUM TERM ANALYSIS:
22nd May:  We should have seen a high at 121.47 for a correction lower. Support areas to watch for are around119.74-90 - maybe as deep as 119.50-55. As this develops watch for bullish reversal indications for a second rally to move above 121.47 and to 122.02 at least...

Good trading
Ian Copsey

Slow going…

That was an exciting day wasn’t it? I was able to take a break, took a walk, sipped some tea and put my feet up. Well, not really but the market appears to have taken that opportunity. I’m not even sure we’ll see much difference today. It’s a long U.S. weekend and probably, with very little to shake the market, the indifference shown yesterday seems likely to extend. I do think yesterday’s range will break but I doubt it will be with much vigour.

In some ways, as I mentioned yesterday, the face-off between Dollar hourly bearish divergences and the Dollar supportive 4-hour Price Equilibrium Clouds extended the deadlock. However, there is another influence, and that being the daily Price Equilibrium Clouds continue to provide a barrier to the Dollar upside. These Clouds in EURUSD and USDCHF are flattening out so it will be a matter of time before there is any breach. In GBPUSD it’s slightly different with its daily Cloud still pressing higher. There’s still a gap below price so some slippage could be seen, so just keep an eye on it…

The Aussie also succumbed to lethargy. It’s basically matching the Europeans in general but begging to resume the decline. Could it do so today? Maybe… but like the Europeans the daily Price Equilibrium Cloud is buffeting the price lows at the moment… but it’ll be a matter of time for the next break.

Yesterday I had a Eureka moment in USDJPY. For two months we’ve had this wretched sideways consolidation, and I’ve had a wretched time working out how these move slot into the larger picture. The end result is that, over the coming few weeks it will break the range but then turn back in on itself. So don’t look for home runs here yet. The coming week or so still has potential for a minor directional move but not anything significant. However, today should see it move back lower. This will help EURJPY move back lower having reached 1 point above my extreme retracement level and I see losses but because of the market lethargy don’t expect much.

If you’re not interested in scalping… then take the day off…

Have a great long weekend
Ian Copsey