Friday, January 29, 2016

DAILY FORECAST FOR USDJPY

INTRADAY CHART
BIAS:      We should see losses today


Resistance: 118.98-06 119.25-30 119.60-69 120.00
Support: 118.86 118.55-40 118.05-15 117.65-75

MAIN ANALYSIS:     Yesterday's earlier pullback seems to have provided the high at 119.06. We now need a break below 118.55 and down into the 118.05-15 area. Take care there and expect a correction before further losses can be seen. Below 118.00 would risk additional losses to 117.65-75. Overall, I feel this decline will be quite deep - perhaps down to around 116.97 or even 116.68. 

COUNTER ANALYSIS:    Only a break above 119.06 would reach 119.20-58… at least and note the 119.60-69 corrective high. 

MEDIUM TERM ANALYSIS:
29th January:  It looks like we have seen a high at 119.06 and this should trigger losses back to around 116.68-97 approx although this will require ratification. I suspect this will then trigger further gains to above 119.06.

Good trading
Ian Copsey


A turn around

My underlying view of the Dollar remains bullish. I have not abandoned the view I made over one year ago (and longer) and continue to see next year as reaching a major Dollar high. Over the past couple of weeks I have been observing a potential barrier in USDCHF around 1.0200-16 but was more willing to give up this barrier in favour of Dollar gains. Yesterday’s strength in EURUSD has proven the view in USDCHF was correct. I have to concede to further gains in EURUSD. This additional rally does not change the larger multi-year structure and the now anticipated Dollar weakness should not be excessive and looks like generating an expanded flat in the Dollar Index.

Therefore, we need to build on the current situation in hand. This Dollar weakness looks valid in USDJPY and potentially in GBPUSD although the Pound is more likely to see greater whipsaws. Both EURUSD and USDCHF are likely to see steady progress rather than frantic trends. Therefore, it may be better to watch for shorter-term trades. The rather choppy lower degree waves are still subject to make the chart look a bit like a baby scribbling on a piece of paper.

One puzzle I have is in AUDUSD. It has a rather difficult development – one that should require another high but we have already seen a significant pullback and I wouldn’t be surprised to see it lead the Dollar rally – but probably not until next week.

With USDJPY not quite clear, it will be best to confirm losses. It will be useful to use the rally in EURJPY to make judgement as to when it will see a reversal. Clearly, this doesn’t look like being controlled by EURUSD so a top in EURJPY will suggest that we’ll see it’s “parent” moving lower…

Have a great weekend
Ian Copsey  



Thursday, January 28, 2016

Hibernation

These past 2- 3 weeks have been tiresome, the market making the most out of finding every possible nook, kink or cranny to go hide itself in order not to have to make a decision on direction. There doesn’t appear to be any real place to go hide  - well maybe some dark, dusty and hidden crack where price can quickly conceal itself for a momentary pause before scuttling away again. The key to seeing a stronger move is in the higher degree structures but these are beginning to run out of nooks, cracks, kinks, crannies and cobwebs to hide behind. There’s still some buffer area that can be tested - but only in the context of remaining in the recent range – and that a stronger move will then bring a temporary whiff of fresh air. I’m not sure it will last for too long.

Actually, there are signs of movement in AUDUSD. It’s still in the early stages so I don’t think we’re going to see any trend developing just yet, but the foundation waves should be the next step that will later generate a more directional move.

USDJPY is probably close to making a move lower also although I'd prefer to see a minor new high. However, the structure has become rather ragged and unstable. This is echoed by EURJPY – although it does seem to require a new high. This tends to suggest care with the development difficult to tie down.

Of all the pairs it is AUDUSD that seem to have the stronger outlook to generate a decent move. It may not look like it initially because of the need to build the foundation waves, but overall keep an eye out on this group in particular.

Probably another relatively boring day. Keep out of the nooks and crannies…

Good trading
Ian Copsey  



Wednesday, January 27, 2016

Mixed outlooks

The market extended its slow-motion introversion yesterday. It also added some puzzles with EURUSD initially losing out against the Dollar – then gaining – then losing once more, while USDCHF made gains. At the same time GBPUSD found a low and pushed up strongly as expected. It has therefore become a rather difficult market to follow without the general correlation between these three in particular. Of course, we can look at the higher degree structures to place them in context, but even that – according to the risks I see – suggests discord between the group. We also have the Europeans beginning to threaten oscillation around the 4-hour Price Equilibrium Clouds that, if it continues, will risk confusion.

For these three it will be best to treat them individually and note the general momentum and technical factors that could trigger corrections or follow-through. Certainly, the EUR – CHF relationship does have potential discord.

The Aussie hit the extreme in its correction lower – reversing 2 points below a 76.4% retracement – and has reversed higher. The lower degree structure has seen pretty direct gains but there are deeper swings coming at higher levels. Overall it should move above the 0.7045 high.

Having started out, some days ago, with the potential for an impulsive rally in USDJPY, yesterday’s break of key support saw a deeper pullback that tends to suggest a more corrective recovery. In terms of the length of the decline from 123.75, this appears to be quite a brief correction higher… This allowed EURJPY to make further upward progress following a recycling. This tends to suggest some whippy moves from this point. It will be best to still sit out and wait for the required number of swings to develop.

Overall the outlook remains steady – and by that I mean that there doesn’t appear to be risk of a sharp move for the moment…

Good trading
Ian Copsey  




Tuesday, January 26, 2016

WEEKLY OUTLOOK FOR GOLD

INTRADAY CHART
26th January 2016

This sure looks like extending gains but with a deep pullback before it reaches its corrective high. I suspect that from here we should see the (navy) Wave iii reach the 176.4%-198.4% projection between 1,128.32-1,134.03. With Wave ii being 57.2% we can expect Wave iv to be between 33.3%-38.2% (maybe 41.4%) before the Wave v can reach minor new highs - probably around 1,135-40. This will form the third Wave a and suggests a moderately deep correction in Wave b.


I continue to expect the Wave c will reach the 66.7% - 76.4% retracement in Wave (b) between 1,143 and 1,157 approximately.

Good trading
Ian Copsey

Obsessive Corrective Disorder…

Wow… the market loves doing things the hard way… It really reminds me of the mess that developed in the middle of last year. These days, once the market has lost its mojo, it reverts into Serious Hibernation Mode, a factor of Obsessive Corrective Disorder that causes the market to shiver and quake so that it goes home to Mummy and cries.

Ok. That’s vented my frustration…

Despite yesterday’s weirdness, the structures just seems to have organised themselves to make the most of deeper corrections and complicated and intricate complex corrections. The general outcome still remains the same but just taking a long winding path to get to its destination. So we are taking another diversion but one that should still eventually reach to the same outcome.

The Aussie didn’t require a diversion. It simply moved back lower as expected. There is still quite a wide buffer within which bounces can occur. It’s one of those moves that needs keen observation to identify triggers for the next larger move. Thus, stick to the task in order to pick the right point.

I was rather in two minds in GBPUSD although with an initial move lower expected. However, it broke below key support but that needn’t imply direct losses… Indeed, I tend to favour another push higher with price having reached support provided by the 4-hour Price Equilibrium Cloud. It needs confirmation to resume the upside. Thus, take care.

USDJPY failed to extend gains and instead embarked on a downward path. This has been deeper than expected but from Friday’s high it still has potential for further gains. Like GBPUSD, the 4-hour Price Equilibrium Cloud is rising and supporting price and that’s my main preference for now. There are some clear target areas for any new high so don’t expect a significant rally. This may help EURJPY higher but the cross is in a really introspective mood and doesn’t look like making any sharp moves still. Thus, it’s probably best to watch for this move to end…

Good trading
Ian Copsey  




Monday, January 25, 2016

Generally positive progress

The two Continental Europeans were the stronger performers on Friday as suggested. This looks set to continue but probably with less momentum compared to Friday. I remain with the view that this larger consolidation should still extend into next month so the potential for longer-term trends looks very unlikely at this point. That GBPUSD did join the European’s directional bias – but in the opposite direction was a little bit frustrating. However, while the Continentals are in a corrective phase, GBPUSD is not – still maintaining an impulsive outlook. Unfortunately the recovery we saw on Friday has implied that Thursday’s low was an intermediate low. This now risks a little more uncertainty with potential for it to move into a temporary corrective phase and thus more broadly correlate with the Continentals.

The Aussie’s rally stalled in the high end of the targeted range and should now dip lower. There’s a support range that we need watch for and I doubt this will break today. Thus expect limited losses and potential for subsequent consolidation.

The breaks of the key resistance levels in USDJPY have confirmed that a low is in place. At the same time it confirmed the impulsive targets within its rally. Having said that, it is towards the end of the current move higher. There are still a couple of target areas on the upside but this shouldn’t occur directly. Thus, take note of the expected support area from where the additional rally can develop.

That USDJPY continued its rally and EURUSD its decline provided EURJPY with a choppy move higher. I have some doubts about this pair. Following the long sideways consolidation and dip, it’s in the midst of an ambiguous outcome although the preference is probably higher for now. It will need some care and probably best to wait until the structure I feel is developing is confirmed. Once that happens the outcome will become clearer.

Have a profitable week
Ian Copsey