Friday, March 25, 2016

Weekly Outlook

I shall be taking a break over the coming week to catch up on sleep… Therefore, I shall just make some observations for the period to next Friday. Clearly we have seen extremely slow and cautious trading over the past 10 days or so, a slow grind higher in the Dollar - slightly stronger momentum in GBPUSD. For the coming days I would not be surprised to see the current range persist (plus maybe a marginal new Dollar high over today … in some pairs.) While, to many, these Dollar gains may have looked corrective in nature, there has been an impulsive action. It’s not uniform across all pairs – and in particular EURUSD and USDCHF are not on the same page in terms of expectations. This suggests a mixed outlook and potential complex corrections that could compensate for the lack of a consistent outlook across the different pairs.

Overall, this doesn’t really suggest that we’re going to see decisive trends over the course of next week unless, of course, there is any particular catalyst that will trigger a more panicked reaction. We’ve had the ECB make a noise about interest rates. The Fed appears set on its course for now. Hence the lack of any strong impetus by traders to push boundaries.

Of all, I see GBPUSD as the pair that has a more defined structure at this point – perhaps AUDUSD also - although they do not seem to be sitting on the same road. This is just another conflict within the mixed and jumbled structures. I’ll even add the Dollar Index that has behaved quite well this past week except the recovery has been a little firmer than I had expected but may well end up developing in a triangle – hardly a surprise given the comments above.

I am also convinced that EURJPY is not going anywhere particular quickly… and while USDJPY has been making headway on the upside I still have some doubts. The structure all the way from the 110.97 low has been mixed and complicated. Therefore, unless there is any obvious trigger I’d suggest taking it step by step.

In summary, this coming week, it will be best to look for continuation or reversal patterns with supporting indicator evidence for quick trades…

Have a profitable week
Ian Copsey  



Thursday, March 24, 2016

DAILY FORECAST FOR EURUSD

INTRADAY CHART
BIAS:           While 1.1187-00 caps we should see losses resume


Resistance: 1.1187-00 1.1223 1.1238 1.1260
Support: 1.1130-46 1.1095-00 1.1076 1.1057

MAIN ANALYSIS:       Losses were seen but edged below 1.1173-77 to reach 111.59. This should see the 1.1187-00 area cap for losses towards 1.1146 and a slightly stronger possibility of 1.1130. Even here the pullback should be relatively shallow - around 30 points - before losses to around 1.1076. Allow for 1.1057. Watch for bullish reversal indications for a correction higher - and could be quite deep.


COUNTER ANALYSIS:     Still, even at this stage, only a break above 1.1200-10 (the declining channel high) would take price back to 1.1252-60 and will mean that I may have misjudged the structure. Also note the 1.1306 resistance as well as 1.1336-42.


MEDIUM TERM ANALYSIS:   


18th March:   I can't say the bearish outlook has been broken. Without strong bearish reversal indications it is difficult to state a definite outcome. This will take a break below 1.1057 at a minimum and preferably lower...

Good trading

Ian Copsey

Snail slime

Seriously… look at the Europeans and even the Aussie… slippy-slidey, slowly, slimy and soporifically sleepy. However, having said that, the market is doing its job - and frankly the general expectations are being fulfilled. There’s still more to come and in general EURUSD and USDCHF have developed in channels and look like being maintained. What has surprised is how GBPUSD has led the decline but is driving into the apex of a mini-bearish wedge. So I’m expecting some deviations between the Europeans over the course of today. This does seem necessary because the Dollar Index has reached the target area I suggested on Tuesday and needs to move back lower. The Index has a little wriggle room on the topside.

The Aussie performed like a cobber on fire, catching the high perfectly for the expected decline. This is still in the early stages of a larger move and this is best used for temporary trades only. Once we have seen more development we should find ourselves in a stronger move but that appears to have more potential next week.

Meanwhile, USDJPY extended its rally - which was not a surprise given that hourly & 4-hour momentum were both pointing higher. It’s becoming a bit mixed now and more care is required but does seem to have potential for a sideways move before higher. The only caveat I have is that because the structure from the 114.87 high has been rather complicated that I am concerned about some surprise breaks. Just take care in this pair. This is also a factor in EURJPY – the king of the complex corrections – that dipped a bit lower than expected before pushing higher still. I’m beginning to feel that the cross could maintain a messy sideways range.

Best vehicles are the three Europeans (EURUSD and GBPUSD more clear compared to USDCHF) and the Aussie…

Good trading
Ian Copsey  



Wednesday, March 23, 2016

More caffeine!

Oh, for goodness sake… ply the market with caffeine – or even a copious supply of energy drinks. This is just awful. You’ve heard of the foxtrot? Well, I think the market is dancing to the funeral dirge. It’s enough to make me sleep 26 hours a day…

Rant over. At least we’re basically seeing what I have been looking for – but just so slowly. Will the pace accelerate? I’m pretty sure that it will not, but still maintains the pace of a group who carries the coffin. Of all, it was GBPUSD that made a more defined move but looks like it had a sudden gush of blood to its brain. As such, it tends to suggest a deeper pullback. At the same time it looks as if EURUSD and USDCHF will continue their Dollar bullish trend but I can’t say that either of the two Continentals will provide the same effort as the Pound…

The Aussie, having reached the first reversal target, stalled and saw its recycling - that was always a strong risk. Whether it will provide the same effort as GBPUSD or the slothful progress of the Continentals is something we shall have to observe…

USDJPY made further gains and drag EURJPY higher – and still needs to push a little more else it will return to the downside but probably in a longer sideways range. Given that EURUSD appears to require further losses we shall have to observe USDJPY for the catalyst but I’m not sure it’ll do so quickly. I should add that the structure in USDJPY is extremely unusual and does tend to give me the feeling that it’s not really constructive – even if I have treated this rally as potentially impulsive.

Overall, this does suggest that today could be yet another day of complications…

Good trading
Ian Copsey  



Tuesday, March 22, 2016

DAILY FORECAST FOR AUDUSD

INTRADAY CHART
BIAS:      Losses should develop but slowly… and with some risk of a recycling


Resistance: 0.7598-10 0.7626-36 0.7661 0.7680
Support: 0.7568 0.7532-46 0.7510-15 0.7475-80

MAIN ANALYSIS:     We have reached the first reversAl at the top of the 0.7532-40 area. There's a bit of a tricky problem now. The correction from 0.7568 is in a structure that could cause a complex correction. An expanded flat extreme is at 0.7546 (and in the span of the (green) Wave b.) Thus, until 0.9645 breaks we could see a recycling back to 0.7626-36. If this occurs then look for the 0.7626-36 area to cap for losses below 0.7546 and 0.7532 to extend losses to 0.7475-80 at least. Next deeper support is around 0.7414.

COUNTER ANALYSIS:    Only a direct break below 0.7532-46 would see losses directly and should eventually approach the 0.7414-40 area… Normally I'd expect that swing low to hold for a correction…

MEDIUM TERM ANALYSIS:
18th March:  Cautiously, I feel the 0.7672-0.7703 area should cap… To confirm this we shall need a reversal lower to 0.7530-60 at least. It may provoke a minor correction but as long as that area breaks we should see losses that should build up a bearish foundation wave.

Good trading
Ian Copsey

A preponderance of lethargy

Ultra-slow development in a structure is one of the most difficult to judge. There are too many mini-minor twists and turns, ups and downs and in my lady’s chamber. At least the direction was consistent and provided gains in the Dollar overall. Even USDJPY managed to take a deep breath and tried to make it back towards last Thursday’s high. I’d like to say with confidence that today could be more progressive… but I can’t. However, we are, at least, approaching the first reversal targets in EURUSD, USDCHF – although GBPUSD still has a way to go.

However… and it’s always good to have one of those “howevers”… a potentially positive outcome was the persistent Dollar gains that have challenged the 4-hour Price Equilibrium Clouds. This has seen tentative steps in attempting to see Dollar bullish breaks of these Clouds. At least, it tends to suggest a positive outcome but the Dollar needs to be a little more feisty to increase any possible acceleration… It’s probably likely that there’ll not be much follow-through until the European session.

Even USDJPY has managed to approach last Thursday’s high and actually helped EURJPY to edge higher – or more in a choppy sideways move. This has seen USDJPY break above the 4-hour Price Equilibrium Cloud and into an unknown. The structure since the 110.97 low is somewhat cryptic but with a daily bullish divergence, along with positive momentum we need see how high this can go. This places EURJPY in a puzzling moment that had been looking slightly bearish but may well suddenly see the structure morph into a more complicated structure. I’d suggest care with the cross with the larger picture suggesting a long, messy sideways move.

Steady Eddie trading again today unless the market suddenly comes alive…

Good trading
Ian Copsey  



Monday, March 21, 2016

Work to be done

Friday didn’t surprise. The moves that we have seen were actually quite constructive but not nearly enough to confirm an impulsive structure – but just laid the foundations of a potential impulse wave. This morning’s start has added a little more, but still not enough and the market hasn’t even reached close to catch a sniff the first reversal targets. Even these first reversal targets will likely trigger a reversal – whether corrective or later confirm a larger reversal. I’m really not that sure we’ll get a particularly decisive start to the week. That last week’s Dollar lows did not provide Dollar even hourly bullish divergences remains another reason to tread carefully.

However, for now, the Dollar appears to still be pointing to the upside. Assuming we do see follow-through from Friday within an impulsive structure it will at least imply a correction and then second follow-through. It will be at that point that we need a more resounding outcome confirmed. As such, it sounds that – unless some greater catalyst springs up out of the ether – that we’ll have to suffer some pretty slow and boring development.

If there is any stronger potential then it may be in EURJPY but much will depend on USDJPY. It spiked higher from the 110.66 low but then slumped into a sideways range. This range has not really made its intent known. The low came with a marginal bullish divergence, but nothing firm and could still see a break of the range of that one (hourly) bar rally. Which end of the range will break is still unknown – but from EURJPY, the risk does appear lower…

I cannot promise a particularly constructive day but by the end we’ll have a little more information.

Good trading
Ian Copsey