Thursday, June 30, 2016

Market Hangover

The suspicions I described yesterday have only been heightened. All will become clearer over the coming 1-2 weeks (at a guess) I suspect, but for now we are probably doomed to see continued consolidation. It’s a bit like ballroom dancing: Slow step, slower step, natural turn, reverse corte, contra check and outside change. Yep, all developed to make you feel sleepy.

Having said that, I think we’ll get a little bit of excitement – that is, excitement for a 90-year old veteran. It’s going to continue to be steady, dull and slow but if I am right it will begin to make sense of what is happening. We’re still working with the lower degree waves that are generating some stodgy development which, at times, can make you go to sleep. The Price Equilibrium Clouds tend to break down in these circumstances with price oscillating around the Clouds. However, in some pairs we have the daily Clouds that will provide the final barrier.

Of all the pairs, it is USDJPY that has a clearer picture. I can’t say that it has a definite outcome but as long as the current gains continue I feel we’ll see the rally continue. The problem with this pair is that the lower degree fractals can be very complex and could easily morph into alternatives. For the moment I am encouraged and feel there is a strong chance of a ragged but directional move underway.

There’s not much more... well there isn’t any more… to add. Take care and don’t expect a home run. Frankly it’s more like a home stumble…

Good trading
Ian Copsey  




Wednesday, June 29, 2016

DAILY OUTLOOK FOR USDJPY

INTRADAY CHART
BIAS:    We need a pullback before further gains

Resistance: 102.84 102.95-15 103.29-46 103.73-00
Support: 102.25 102.10 101.75-85 101.39

MAIN ANALYSIS:    So far so good. Momentum is bullish, price is now above the 4-hour Price Equilibrium Cloud and - so far - we have seen an impulsive development but still in process. This looks like seeing losses initially - to around 101.75-102.10 - I tend to feel the lower area. Watch for bullish reversal indications. On this next rally we should see gains back to 103.29 or 103.46 at least. If the early pullback doesn't reach 101.75 then the next rally may be able to move above 103.46 - the next target at 103.73. However, the correction shouldn't be too deep ...

COUNTER ANALYSIS:    A break below 101.75 would frustrate even further and could see losses towards 101.39.

Good trading
Ian Copsey

Anti climax…

Gosh, following the extraordinary events on Friday - the hype, the adrenalin and the largest one day move in the current financial markets – it has been a bit of a let down. Perhaps it was a head-rush that caused the market to fall into involuntary shock. Maybe there are some who are counting the costs – I see from George Soros in particular. It tends to suggest that fundamentals are not the be all and end all of how to approach forecasting a market. However, I suspect that strategies are being laid.

As I’ve followed the individual pairs I’ve noted a lack of intensity. They seem to promise the downside – but then back off. It tends to suggest the potential for corrective patterns and perhaps could be equated to a mini-version of the sideways consolidation that we’ve seen in EURUSD since March/April last year. Perhaps there is a fear of committing to a bullish Dollar following such a move in case the bigger players will wipe them out before committing to a Dollar follow-through.

Whether this may be the case or not, the market is clearly nonplussed at the moment. The movement between EURUSD and USDJPY is neutralising EURJPY – although appears to have a basic upward bias but driven by USDJPY – that has broken above the 4-hour Price Equilibrium Cloud. Rather surprisingly, following the up-down-down-up in USDCHF it appears to be making amends for its indiscretion. Even then, I can’t see particularly strong momentum.

Down under, the Aussie appears to have given up too, backing up from the sharp losses on Friday and perhaps being polite… “after you… no, no… after you old cobber…”

Somehow, I sense we’re going to eek out this week in a rather disappointing anti-climax as we wait for possible loss-cuts by those who didn’t anticipate such a move as we saw last Friday…

Good trading
Ian Copsey  




Tuesday, June 28, 2016

I’m bored now…

After Friday’s antics yesterday appeared pedestrian. I would have liked a little more zest but I guess we’re back to the normal, humdrum development. I think we all know the eventual outcome but now comes the time where we have to work for our rewards again. I can’t see this being a particularly directional day but more one that will see some relatively broad swings. This is certainly reflected across the three not-quite-so amigos. Thus, expect to see the current Dollar gains extending but for a correction. Indeed, this is also reflected in AUDUSD…

The JPY pairs have been less than lacklustre. That suits my expectations. There is no confirmation yet that USDJPY is going to repeat its bungee jump. It is currently flirting with the 4-hour Price Equilibrium Cloud – something that could still see it’s heart rate monitor still remain up and down – while the 4-hour Cloud has begun to flatten out. Even if it breaks, we still have the challenge of the declining daily Cloud. Therefore, it doesn’t seem like it will make any astounding moves today.

The fallout of a flattish USDJPY and limited range in EURUSD doesn’t seem to auger well for EURJPY. It’s sideways to lower – drifting lower in a gradual decline – but I can’t get too enthused about it at this point.

Thus, it seems like a relatively dull day…

Good trading
Ian Copsey  




Monday, June 27, 2016

Steadier trading?

That was the largest gut-wrenching move I have seen in my 34-year career in Forex. GBPUSD dropped by 12%. I recall researching the largest 1-day moves some years ago and basically the maximum was around 6%. Did Brexit cause that decline? Well, I guess so but I actually forecast this drop back in the second half of 2014. It was always going to happen. What’s more, once the current furore is over – and that won’t be until later next year – both EUR and GBP will recover but GBP will be stronger. On the other hand, the Euro will, in years to come, will make new lows that in GBP will correspond to a correction only.

Here is the chart when I first forecast this decline:



So… what’s in store for today? Good question… Further direct losses in the Europeans or a deeper correction higher before those losses. That’s the puzzle I have. The larger issue is that the swings are developing in such violence that it’s very tough to be certain of both entry and exit points. Most likely the better outlook is working with the downside.

The Aussie saw a very deep pullback. I won’t rule out a marginal new corrective high but it’s touch and go. We’ll have to see this morning’s gap exceeded. Otherwise, it’s basically in the European group.

That USDJPY collapsed was a source of annoyance. However, interestingly it stalled at a low support area. It has a minor daily bullish divergence – and a longer 4-hour divergence. However, Friday’s drop hardly provides any confidence on the upside. These recent legs lower have been rather aggressive so it’s difficult to suggest any bullish outlook but I’d also need a downside confirmation below Friday’s low… Overall, it should allow EURJPY to continue its decline…

Take care while the swings continue…

Have a profitable week
Ian Copsey  






Steadier trading?

That was the largest gut-wrenching move I have seen in my 34-year career in Forex. GBPUSD dropped by 12%. I recall researching the largest 1-day moves some years ago and basically the maximum was around 6%. Did Brexit cause that decline? Well, I guess so but I actually forecast this drop back in the second half of 2014. It was always going to happen. What’s more, once the current furore is over – and that won’t be until later next year – both EUR and GBP will recover but GBP will be stronger. On the other hand, the Euro will, in years to come, will make new lows that in GBP will correspond to a correction only.

Here is the chart when I first forecast this decline:


So… what’s in store for today? Good question… Further direct losses in the Europeans or a deeper correction higher before those losses. That’s the puzzle I have. The larger issue is that the swings are developing in such violence that it’s very tough to be certain of both entry and exit points. Most likely the better outlook is working with the downside.

The Aussie saw a very deep pullback. I won’t rule out a marginal new corrective high but it’s touch and go. We’ll have to see this morning’s gap exceeded. Otherwise, it’s basically in the European group.

That USDJPY collapsed was a source of annoyance. However, interestingly it stalled at a low support area. It has a minor daily bullish divergence – and a longer 4-hour divergence. However, Friday’s drop hardly provides any confidence on the upside. These recent legs lower have been rather aggressive so it’s difficult to suggest any bullish outlook but I’d also need a downside confirmation below Friday’s low… Overall, it should allow EURJPY to continue its decline…

Take care while the swings continue…

Have a profitable week
Ian Copsey