Tuesday, January 2, 2018

PROBABLY A SLOW START – BUT MAINLY DOLLAR BULLISH

Well, I can’t say that the outlook I left you was quite as expected. It began well with a pullback lower in the Dollar but it deepened far more than expected. Yes, this has been a bit of a pain but the correction we saw could provide a decent follow-through back into the opposite direction. I was gobsmacked with GBPUSD but finally realised that the apparent 3-wave decline down to 1.3301 actually saw the 1.3309 low was the Wave -iii- and then formed the Wave -iv- and Wave -v-…

I’d like to say that we’ll see firm gains in the Dollar but there are some niggles. For a start, EURJPY still needs a dip lower and a final 3-wave rally. I suspect the rally is more likely to be triggered by strength in USDJPY rather than EURUSD. The latter appears to have found a high but we don’t have a decent bearish divergence – in the hourly & 4-hour timeframes. Thus, it will be best to take care with this pair – and actually in USDCHF – but it seems to be a limited new low for a reversal back higher.

USDJPY saw a deep pullback in a Wave [b]/[iii] and has barely any room below – just 7 points below would reverse this lower. Thus, I suspect it will move higher pretty soon after open – and hopefully – to provide the lift for EURJPY.

That just leaves the Aussie that did indeed extend gains and, as far as I can see, we may well have completed the pullback. There may be a small risk of a second zigzag but, in general, with the majors beginning to look for Dollar gains, I suspect we’ll see the foundation waves for the reversal…

Have a profitable week
Ian Copsey  







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