Tuesday, June 30, 2015

The EUR begs to deceive…

That was a roller coaster that I hadn’t expected… Obviously I was sucked into the downside in the Euro and wasn’t expecting the reversal. However, at this stage, I don’t think we’ll see a high above 1.1466 – or if we do, not by much.

To be honest, unless I am deceiving myself, EURUSD looks pretty straightforward now. It’s USDCHF and GBPUSD that hold more puzzling structures. GBPUSD does have potential to correct higher a little deeper but has a relatively wide range in which it can stall. USDCHF should be considered along with EURUSD as to where it will stall. It was the additional new high yesterday that appears to have provided an illogical structure/outcome. Overall, I’m not looking for any substantial/ excessive moves today but I do think that by today – maybe tomorrow (barring some hellish sideways consolidation) – we’ll be back looking for the Dollar to strengthen.

AUDUSD is stretching the limits. I’d like to make a firm statement but there are some risks and the key element is understanding where the upside will indicate a further push higher – or indeed, on the downside, where the bearish move resumes…

Following the early sharp drop in USDJPY, it rebounded but then has remained in a range. At this point it looks like it has stalled in an in-between stage. I can see both sides of yesterday’s range being broken. Whether both will happen over the course of today or whether it will end up fiddling around indecisively is the bigger unknown.

As for EURJPY, the only think I can assume is that the huge gap in the chart contained all the intermediate targets and corrections since, having seen the deep recovery, there is no other explanation… Overall, I still feel the dominant influencer here will be from EURUSD… Therefore, retain the main focus on EURUSD to identify the high…

Good trading
Ian Copsey  


Monday, June 29, 2015

The EU Crocks!

It had to come. Last Tuesday I wrote:

We all know that we have to play the game of sitting still and knowing that, in a split second, all hell will let loose and the market will go totally berserk. Once this phoney process of going through the motions of discussions is over the only outcome will be Euro bearish. The key unknown is where to place stops…”

Already down by 160 points on open, it reflects what the market has been waiting for… The tougher part for me is the information hidden in the massive gap. I have a string of intermediate targets but which one will provide the correction is impossible to judge and even then, I doubt the market will spend much time giving consideration to the depth of the correction.

There has been a mix of reactions in the other currency pairs with the gap higher in USDCHF quite conservative – similarly with GBPUSD. David Cameron must be well pleased with his stance with the EU… Not forgetting AUDUSD, the more conservative dip on open is also reflective of the limited nature of the impact caused by EU meddling.

What has been the out and out loser, far more than EURUSD, is EURJPY. With USDJPY appearing to buck the general Dollar bullish trend by gapping lower by some 100+ points the combined joint venture has seen the cross collapse by over 300 points…

It’s going to take time for this initial furore to die down although overall it will begin to generate a more recognisable structure to follow. However, the fate of the Euro will not be a pretty one for quite some time.

Have a profitable week
Ian Copsey  


Friday, June 26, 2015

EU-wwww…

I had a nightmare last night. I dreamt that the Greek debt discussions continued through the entirety of today, maintaining a dull, drab, dour and dozy consolidation but with the weekend providing an outcome that provoked a 200 point gap on Monday’s open. It brought me out of the dream giving me the sweats. After eventually getting back to sleep I had a second nightmare, even worse and frightening than the first… The market opened on Monday with no solution and the discussions continued for the entirety of next week…

That’s enough to send shivers down anybody’s spine…

In the meantime, this continued sideways move in the Europeans, AUDUSD and USDJPY is still a “threat.” These consolidations cause a lot of issues with the Wave B’s easily developing in their own complex corrections and lots of noise in the lower degrees that make life extremely tough. Over the past few weeks in the U.S. indices we have seen an irregular triangle in a B leg of a larger irregular triangle. Following these is mind blowing… and if there is no solution over this weekend there’s every risk of seeing more of the same.

Looking at the remnants of yesterday’s moves – there seems to be a mishmash of structures that confuses in terms of individual structures. If I see any more likely outcome, then it’s probably a firm USDJPY and weak GBPUSD – but, of course, requiring confirmations. This is partly due to what looks to have been a complete corrective decline in EURJPY. Having said that, the bullish reversal indications are not that strong. Hence the need for confirmation.

Otherwise, unless the EU “discussions” continue through the day, it’s difficult to see any strong desire from the market to stand out on a limb…

Have a great weekend
Ian Copsey  


Thursday, June 25, 2015

Subtle shifts

Another day of limited moves, but with some breaks and subtle shifts between bullish and bearish. For a start, my expectation for one more high in GBPUSD was proven wrong. The break below the 1.5667 low was the killer punch. In the meantime, EURUSD and USDCHF had a relatively quiet day, ending up in range trading and which may not yet be complete.

I have been running a dual count – obviously one bullish and one bearish – both in the early stages of development that could allow a catalyst to provide the outcome. There’s a catch here also since, while I am expecting the Dollar to strengthen, the follow-through may not be too strong. At that point we’re going to have to watch what happens next.

So we’re looking for other clues, potentially from the cross rates. Over the past two days we’ve seen EURGBP continue its decline and that appears to suggest the trend will continue. In EURJPY there has been a tentatively bullish development but is still at a fragile part of the structure. It does look as if USDJPY can continue its rally but this doesn’t provide too much information about EURUSD – but as mentioned, I’m not really expecting strong move at this point.

As for the only other currency pair – AUDUSD – it remains in the range of the past month. It seems to me to have a potential bullish outcome, but needs confirmation and until that occurs I’d prefer to remain neutral.

Overall today, the first half looks like neutral range trading so we’ll have to see how this develops and watch for the break. I feel it could be USDJPY that has the stronger day.

Good trading
Ian Copsey  


Wednesday, June 24, 2015

The bowels are rumbling

I have to say yesterday was a surprise. I’ve been Dollar bullish for so long but had not expected the strength that developed. So much so, that I’m just a little wary. My first thought was that perhaps we were seeing a recycling, but for several reasons yesterday’s move doesn’t appear to be appropriate for a recycling. We had so many irregular triangles across a variety of markets that I look nervously over my shoulder all the time. These are probably – no definitely – the most hazardous formations that can look like a normal triangle but then morph into some hideous, profit sucking monster that hits the bottom line.

Will the Dollar gains follow-through? I think so. Will these gains extend further today? Maybe, but not by too much … most likely. Currently, I’m seeing some minor pullback and follow-through but then some consolidation. Once that consolidation is done with, we should see another firmer move.

If there’s any higher chance trend – or at least a directional move – then it’s GBPUSD which made a good job of extending losses but I still feel that we need to see a new high. However, I feel this could take a day or three to develop.

The Aussie is at risk of seeing one of those irregular triangles I mentioned above… It’s not really in a position to make a stronger directional move – although it’ll happen at some point.

Even USDJPY has been strong but could find the 124.43 high difficult to overcome today. That level and also 124.61 are key to the upside… And it needs to make gains to help out EURJPY which drifted lower to approach the 137.97 low. This is another puzzle because I still feel the cross needs to reach a new high. This tends to suggest that EURUSD is unlikely to see stronger losses at this point.

So, all a bit mixed and means that there are still potential problems to overcome before any larger direction trend will develop.

Good trading
Ian Copsey