HARMONIC ELLIOTT WAVE

And down she goes…

noreply@blogger.com (Ian Copsey) — Fri, 24 Feb 2012 02:11:00 +0000

All best plans laid to rest… At least yesterday’s plans that now look as if I had over complicated the anticipated correction. It seems the market wanted to commit the Dollar to the downside directly and therefore the move lower is well and truly underway. I suspect that this could develop pretty directly with the Pound having faced a gaping hole should it slip any further but now recovering through the aversion to Dollars. This is going to require quite a sustained run higher in the Pound to reach the major upside target and therefore tends to slot in with the same in the Swissie and therefore probably the Euro too.

There is a problem I have for the immediate move since although I can generate projections we haven’t seen sufficient base development for the intervening projections for the smaller fractals that make up the larger. In particular the current move is very much clouded in darkness as it does have any specific target. I could point to the 1.3548 daily corrective high, and I do feel this will have a temporary impact, but otherwise it has been difficult generating accurate levels.

Therefore, keep your eye on the ball and the other maintaining a trailing stop that could produce some decent returns. The time frame for the final Dollar low, from a few sources I keep in touch with, appears to be in the middle of March.

The Yen has lost some of its luster, at least for now, and as mentioned yesterday the pullback is likely to be quite a long and arduous affair. That it failed to reach the ideal 80.50 target annoyed, but I can’t see any reason to see this move towards the 80.50-89 area for the while and expect further slow downside progress. It may slow the rally in EURJPY which I had thought would see a pullback, but the way it keeps pushing higher seems to suggest it means business in a more direct rally.

Thus, emphasis should still be to sell Dollars on pullbacks and maintain a trailing stop…

Have a great weekend

Ian Copsey

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There are a few strange developments…

noreply@blogger.com (Ian Copsey) — Thu, 23 Feb 2012 02:07:00 +0000

I found the analyses a puzzling mix today. What happened in the Euro and Swissie did not surprise but was actually the most complex of alternatives I had envisioned. It hasn’t ended yet and may well produce a sting in the tail although if the Dollar downtrend remains intact the sting needs to develop in the form of minor new lows and a recycling. That part was quite a simple deduction but some of the other pairs did raise my eyebrows and my concern.

Just focusing on the other European – the Pound… At first I was quite content with the losses seen and looked to be right on forecast. However, the greasy slip down towards the 1.5644 low was just a bit too much for comfort. This is now stretching my imagination if I am to remain bullish here. There’s a bit of wriggle room and I’ll detail the limits in the individual analysis today, but suffice it to say that if this pair doesn’t recover swiftly and break resistances there is a hint of very strong losses. Given I don’t feel the same way about the Euro and Swissie I’d rather wait for confirmation to be seen in the Pound but it is a risk that should be noted.

USDJPY extended its rally, dragging the cross with it. However, I can’t see either as having the legs for much more topside. Although the area we are approaching has been a target for me, what has bugged me is the lack of a decent intermediate pullback in the approach. Nevertheless, momentum in both has slowed – in hourly and 4-hourly – so I do feel it’s time for a deeper pullback for them both. However, I do see it as a correction at this point.

So today I feel should be a more interesting and important one, in particular within the Europeans. The balance that needs to be observed is between how the Euro and Swissie develop versus the Pound and whether one begins to exert influence over the other. I still find it hard to get bullish Dollars at this point but with this conflict it’s worth noting what breaks what…

Good trading

Ian Copsey

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I still see the Dollar weakening… but it looks like we need a correction first

noreply@blogger.com (Ian Copsey) — Wed, 22 Feb 2012 01:40:00 +0000

Well, that wasn’t very convincing yesterday… Right across the board the expected moves just failed to materialize. Attempts to push the Dollar lower were met with a solid block and whippy moves that have soured the immediate bearish structure. Indeed, it has become so complicated that it seems more likely that we’ll see consolidation for another day or two. I haven’t changed my underlying view but need to adjust to the immediate confusion and allow for a more complex corrective structure to develop and complete before the downtrend resumes.

Perhaps of all currency pairs the Pound exemplified this by refusing to push above the 1.5880 high and instead drift lower. This pair, was the exception in the long correction by forming a corrective structure that could extend into a more sideways consolidation, and so it appears to be. Perhaps ironically, if I have judged this correctly, it may well be the simplest structure to follow in terms of extremes rather than the internal development that still may well be quite messy.

In all this mess I do feel we shall need to allow for a new high in the current move in the Euro. It shouldn’t reach the 1.3321 high but once peaked should make a messy drop back lower. In some ways I am quite content with this as I have a series of upside targets in the U.S. Indices that should hold for a correction lower – not a deep one but enough to work well with the Dollar outlook. Once that correction is complete it suggests further gains that should work in concert with the expected follow-through in the Dollar.

The Yen is bugging me a bit. I’ve been looking for a deeper (and long in time) pullback. I still prefer this but it’s been stubbornly persistent. A little care is still therefore required but be aware that the lack of any deep correction since the 77.36 low does imply a deeper pullback at some point…

Good trading

Ian Copsey

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I can only see the Dollar weakening further…

noreply@blogger.com (Ian Copsey) — Tue, 21 Feb 2012 01:24:00 +0000

The pullback I looked for on Friday just didn’t materialize and even over yesterday the market continued to sell Dollars. It’s interesting to note the hourly Dollar bullish divergences in the Europeans and they should be noted. However, I can’t help but feel that the structure just doesn’t quite fit into a scenario calling for a correction. More, I see the downside continuing though it does seem to need that follow-through quite directly else I’d have to question the current structure I’m following.

Looking at the Pound in particular the structure does imply a potential detachment from the Euro and Swissie. I do expect the Pound to rally overall but there appears to be a clearly defined initial projection that would imply a subsequent pullback. However, the Euro and Swissie seem to be pointing to more persistent losses. If there is any concern I have it’s this potential detachment between the three. Thus, keep that in mind in case the development I suggest does not materialize.

Dollar-Yen… It’s progressing well but a little more directly than I had expected. The deeper pullback I had been expecting does look like being under progress and could slow the upside progress in the cross against the Euro. There does seem more immediate upside potential but not by too far as a pullback is expected from not too far higher than yesterday’s high. It could be through the cross that we may be able to judge the relative performance between the Euro and Yen, possibly even provide some clues about the anticipated pullback (from higher levels) in the Pound.

Overall, I feel the emphasis is still Dollar bearish against the Europeans but there are signs that these may initially be limited due to the Pound and EURJPY so be aware of levels that would clarify how these will progress in the larger picture.

Have a profitable week

Ian Copsey

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Issue solved… case closed

noreply@blogger.com (Ian Copsey) — Fri, 17 Feb 2012 02:25:00 +0000

Yes, I continued to get bugged yesterday. I had been watching the Pound lead the correction lower from the 8^th February high and saw that in its position within the structure there was very limited downside. It was very critical support that on break would send price right back to the 1.5233 low. The Euro had started slowly but with an undetermined retracement apart from anywhere between 1.2623 and 1.3155. Thus, with the Pound approaching its downside limit I had assumed that the Euro’s decline would be similarly limited… Of course, we now know that the Euro decided to outstrip the Pound.

Well, all’s done and dusted now. I’m happy again and the good news is that we should be on the next leg lower in the Dollar. Keep in mind that once this decline is complete it will mark the lowest you will see the Dollar for many years…

Ok, first legs of the move are probably done with and thus the main risk today is for a correction. This could take many forms but most likely, given the long U.S. weekend we may find that it becomes a rather complicated one. I’ll add that in the Pound’s position the pullback should not be excessively deep and that is therefore potentially pointing to a complex correction that could even generate lower lows that this morning’s but then a recycling. Bottom line is that when the next drop in the Dollar does seem to be pointing to a strong directional one so be prepared to jump on for a ride.

A note on USDJPY… further highs seen and this is looking more and more like the real thing. It’s probably worth being absolutely sure by a break above the 79.53 high but right now the structure is developing pretty well. Having said that the 79.53 high should hold on first test… The second test has more chance of breaking it… This is also being reflected in the cross against the Euro and it’s likely that the cross will provide the best return.

Have a great long weekend

Ian Copsey

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Crunch time…

noreply@blogger.com (Ian Copsey) — Thu, 16 Feb 2012 01:46:00 +0000

Boy oh boy does it bug me when the set retracements are approached, the market bounces all over the place, looks like reversing but then doesn’t… and still cannot manage to break those key levels. We’re right there, within a Hadron’s particle distance of key Dollar resistances, the market flapping about like old cods and clearly not really able to commit to either direction.

I can’t say it’s looking that good either in terms of the Dollar resistance areas I’ve cited in the Europeans. I want to be mindful of other alternatives and could envisage slightly deeper pullbacks in the Euro and Swissie but the Pound really has very little wiggle room left on the downside and that’s concerning me. However, first things first, let’s see those Dollar resistance levels broken first and then judge the reaction… Otherwise the structure still has more potential for a complete reversal back to a bearish Dollar.

On a bullish Dollar front USDJPY performed very well yesterday, topped out at my resistance area and dipped down to my support area. This is another two-edged sword. On the one side any renewed strength above yesterday’s high is going to swing the balance to confirm the 33 year cycle low and provoke stronger follow-through. On the other hand a drop below yesterday’s low – and a bit more – would confirm a final surge to a new and longer lasting historical low. At the moment the bias remains on the upside…

Probably Asia won’t do very much and will wait for the European time frame to wait for news and it’s probably then when we should begin to see more definitive development. For now I’ll stick with a Dollar bearish view against the Europeans but with one eye looking over my left shoulder and the other eye over my right shoulder…

Good trading

Ian Copsey

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Approaching the limit

noreply@blogger.com (Ian Copsey) — Wed, 15 Feb 2012 01:46:00 +0000

Yesterday sprung a few surprises. The warning came with the Euro stalling breaking below the 1.3155 low while the Swissie didn’t manage to break above 0.9200, an event that would either mean we would see direct resumption of the Dollar downtrend or a more choppy route to lower levels. Even the Pound has dared to push the limits of its retracement support and thus causing all three to probably require yet another push in this correction before the Dollar can finally resume its downtrend. Certainly, all three are now beginning to see Dollar bearish divergences develop in the hourly charts which encourages the expectations.

However, first things first, the initial risk should be for further corrective highs. Once this Dollar high is established we can begin to plan the development in each of the Europeans, all in different segments of their own structures. What does strike me is that the Swissie probably has the edge on the other two in terms of the directness and strength of the decline. Thus, for the biggest bang for your buck I think this is the better vehicle.

One more currency pair that surprised was USDJPY… The push above 78.28 was not really expected. I could still make a case for the highs seen being just a deeper projection in the final leg of the large irregular triangle but I’m not so sure. Momentum seems more positive than negative and while I’m not expecting much follow-through higher today I feel the scales are tipping towards the upside. We shall need to watch how any move lower develops in terms of structure and depth. However, as we have been for some months, we are within the window of a 16.5 and 33 year cycle low and have achieved the minimum downside target. If this moves much higher – and to the 79.53 high and above I feel it will signal further gains towards the 85.52 daily corrective high. So, keep a sharp eye on this one…

I should add to the above that even EURJPY is beginning to display quite firm upside risk and much above where we are now could well mean we move much, much higher.

In summary for today, be aware of the risk of marginal follow-through higher in the Dollar (versus Europe) but look for selling opportunities…

Good trading

Ian Copsey

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Signs are pointing to the Dollar downside resuming

noreply@blogger.com (Ian Copsey) — Tue, 14 Feb 2012 00:59:00 +0000

Yesterday’s price action didn’t come as too much of a surprise. Overall I feel there’s a strong risk that we’re reaching the end of the corrections that could see the Dollar downside resume. I have to add a little caution here as technically there is an argument for extended sideways consolidation in the Euro and Swissie. Perhaps it’s possible in the Pound as well but I have my doubts there. Let’s just say it is something to keep in mind.

Then what is the argument for the Dollar to resume losses? Well, partly the Pound could have seen its corrective low, but if not there isn’t much more room on the downside. The question is perhaps, how long can it go nowhere in such a tight range? I’ll also note the U.S. equities that have performed admirably in rallying back towards them. I still have them broadly bullish and therefore tend to correlate with Dollar weakness.

This general Dollar weakness is also reflected in the Yen. However, this shouldn’t occur directly. I still maintain that it needs one more push higher before reversing back to the lows. Therefore, the overriding governing influence remains on the Dollar downside and it’s more a matter of timing…

Therefore, for the first half of the day at least I suspect we’ll see the Dollar firm up gradually to marginal new highs above yesterday’s (in the Euro and Swissie and possibly Yen also) but then I’ll expect the downside to come back under attack. It’ll probably still not break range today but it’s something that could develop by tomorrow.

Good trading

Ian Copsey

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4-D correlation…

noreply@blogger.com (Ian Copsey) — Mon, 13 Feb 2012 01:30:00 +0000

Friday’s drop in the Euro has confirmed the 1.3321 high as the end of the rally from 1.2623. Thus, we are seeing a correction to the rally from 1.2623. Ok, that’s the easy part. How deep should it correct? That’s the more difficult part but we can get guidance from the Pound and Swissie. Now, this is where the headache develops…

All three are in entirely different parts of their own structures but all three basically in a Dollar bearish move. In terms of the degree of the retracements of all three, they have made the minimum pullback required. That doesn’t mean they can’t correct a little deeper but it does warn us that the Dollar downtrend could resume at any time. I should add that the correction in the Pound has already been much deeper and more importantly in a structure that doesn’t allow much more in terms of depth or complexity. This one has already been a modestly complex decline. It could manage one more “wriggle” but there’s not a lot of “wriggle room” left.

Comparatively, the Euro and Swissie do have potential for a more shallow sideways consolidation that could last a day or two more and it’s during this possible consolidation that the Pound could manage to perform its last wriggle. If anything I favor this outcome. However, bottom line is… be prepared for the Dollar to resume losses at any time… When it does the implication appears to be for quite a direct move so be prepared to jump on its back.

The Yen… well, this one is very close to either finding its final high or confirming the 16.5 & 33 year cycle low. There’s just a matter of whether the current correction is complete. It can get a bit lower in this correction but not by too much and the upside should be reasonably limited after this. If it gets too high then be prepared for a stronger follow-through. Although the cross against the Euro is looking strong I do expect it’s the Euro that will drive this rather than the Yen which will add yet another piece of the entire jigsaw in terms of when the Dollar will resume its downtrend.

Have a profitable week

Ian Copsey

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Into a high risk area where a correction is possible…

noreply@blogger.com (Ian Copsey) — Fri, 10 Feb 2012 01:45:00 +0000

That was mostly a day to forget… lots of huff & puff but very little to show by the end of the day…

Perhaps it would be better to start with what did move – the Japanese Yen. As I was writing the report yesterday it struck me that for quite a few weeks I had been hammering on about a target around 75.97-12… Ok, it took me a while to realize that 76.02 was in that range but I am getting old… That target was a potential penultimate leg of a triangle that started on the 1^st of August last year… Yes, I know it doesn’t look like a triangle but the ratios actually fit quite well and one leg is irregular (the dip to 75.57.)

So if 76.02 was the penultimate leg then we’re actually quite close to the end of the triangle… While this could poke above 78.28 it should not move above 79.53. Now, given the 16.5 and 33 year cycle lows are due in this general period we also need to be aware of whether this rally will stall and reverse lower for one more drop… or … it is due a bigger rally. The unfortunate complication is going to be the fact that whichever develops the risk is that both scenarios will require a move lower… So for the moment we move higher… but it shouldn’t last for too much more now.

Back to the Europeans… Finely balanced. The Euro is very close to the minimum projection to end its current rally. Momentum is clearly displaying sluggishness with the risk of Dollar bullish divergences developing. The Swissie almost reached the minimum target I set. The Pound… well… decided to take a tour of London. If I have any preference then I point to the Swissie which, with the prospect of a correction that needs to match with that in the Euro, suggests additional losses first. The Pound may well have found it’s high and should therefore see losses but the structure is about as complicated you can get for a directional move.

All I can suggest at this point is to be aware of the break levels that would indicate the next move and also that the Dollar should be due to correct higher at any time now…

Have a great weekend

Ian Copsey

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Slow going but Dollar losses still on track

noreply@blogger.com (Ian Copsey) — Thu, 09 Feb 2012 02:04:00 +0000

It was hardly an emphatic performance yesterday in terms of extending the losses from Tuesday but basically positive nevertheless. There does still seem further to go and I see this more a matter of coordination in terms of the individual currency pairs. I’d like to say that the losses could actually accelerate to a certain degree today but there are a couple of “issues” that need to be resolved with the Pound and Aussie. Both saw sharp losses but from the anticipated areas yesterday. I am rather mixed on the Pound but feel that the Aussie does have some early risk of extending those losses. The end result should be for them both to recover – and that’s the balance we have to observe in terms of the correlation with the Euro and Swissie.

Thus, it looks like a cautious start to the day with emphasis more on observing the initial moves and how they fit in with each other. However, overall the basic Dollar downtrend remains in place and I don’t think it has quite finished yet. This is actually now more a case of identifying the final lows that will provoke a correction to the losses seen from the high on the 13^th January.

Elsewhere USDJPY poked its head above 77.00 which was not expected. I could just get bullish here, especially considering the firmness also shown in EURJPY. However, there is a possible alternative if I had misjudged the decline from 78.28 so until yesterday’s high is breached there is a sense of caution. To better judge this, the cross will be interesting to watch as there have been potential signs of quite a strong rally. It’s still a little touch and go but if there’s much more upside we could find this looking very strong. At that point we’ll have to see whether it’s the Euro or Yen that is the main driver.

In summary for today, be more cautious until European trading but probably we’ll see some more definitive moves in the later stages…

Good trading

Ian Copsey

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Limited losses to come before a correction again…

noreply@blogger.com (Ian Copsey) — Wed, 08 Feb 2012 02:27:00 +0000

At long last… The Euro has finally broken higher and even above the 1.3234 high. Now the question is how far can this extend? This part is the trickiest since there is no implied target from the higher time frames except a broad 1.3330-1.3530. Somehow we have to fine-tune quite where in that large range the high will finally stall. There are of course projections generated from the rally that began at 1.2623 but they span a large range also. What about the other currencies?

From this perspective I really can’t see excessive Dollar losses against either the Swissie or Pound. These areas are discussed in the report so take note. The Aussie also has limited upside at this point which tends to back up the probability that we’re going to see the Euro stall in the lower to mid area of that larger range. Be prepared to look for stalling/reversal patterns across all four currencies pairs and on the assumption that they’ll all occur at the same time it should help with the identification.

Then what? Well, it’s not impossible for the Dollar to go and grind out another messy correction similar to what we’ve just seen. Certainly the implication from the Pound does imply a modestly firm correction that will incur a degree of recycling so potentially a week or so of consolidation again.

On the Yen… it has topped out exactly where I had indicated. It should have another dip to come in the first half of the day but is due a pullback before any further losses can be seen. Of course with this pair the corrective patterns have a tendency to hang around for a while but just be aware that as long as yesterday’s high holds the direction should be lower.

Quite how this will impact on cross against the Euro is difficult to judge. The cross had a stronger day than expected and is running a fine line between bearish and a recycling higher. Obviously the impact of its constituent parts will make the impact but with the Yen apt to do nothing for days or the potential for a final dip in this move and reversal is going to be difficult to make definite judgments. However, I’ll outline the lines on both sides of the coin to try and highlight risk.

Good trading

Ian Copsey

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Conflicts and confusion

noreply@blogger.com (Ian Copsey) — Tue, 07 Feb 2012 01:38:00 +0000

I can’t say yesterday was close to expectations. I wouldn’t say “just the opposite” either, at least in some cases. The overriding interesting point I noted was that all three Europeans pushed the extremes of the maximum retracement areas I have been outlining. The bigger problem for me is integrating those retracements with the manner in which they were approached. GBPUSD and USDCHF are more straightforward but EURUSD does raise a question mark in my mind as does the implications of the next move from all three.

That’s the key – the implications for the next move… In terms of retracement levels USDCHF could just resume its downtrend. However, both EURUSD and GBPUSD don’t seem to share that immediate outcome although I still feel they have the capacity to make minor extensions before a correction. If there is any potential for them to correlate then it’s more that USDCHF can begin its move but with a deep pullback while the other two can make their minor new highs and see a shallow correction. Then all three can extend their underlying moves.

So while I feel we need to take this cautiously it probably provides a template to work with to judge whether the required developments occur. It is something that would fit into the outlook for AUDUSD also. Certainly, right now the market is demonstrating a good deal of confusion and indecision that tends to generate chaotic price development.

Failing that the alternative is for the correction to painfully extend just a little more...

Just to cover USDJPY… The ideal is still for another minor new high but overall the downside looks imminent here and in the cross…

Good trading

Ian Copsey

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noreply@blogger.com (Ian Copsey) — Mon, 06 Feb 2012 02:18:00 +0000

Consolidation continues but should turn into Dollar losses by the end of the day

Some time late in my day on Friday I was informed that it was non-farm payroll day. You gotta love ‘em don’t you? Everyone gets hyped up. Cries of “the Euro must collapse now” and “look at those numbers, the Euro can’t survive.”

But it did. And the final impact was to extend the consolidation, let everyone go home and stew over the weekend. Has it changed the underlying landscape? Never say never, but I don’t think so. Indeed, the dip stalled nicely in the correct support area suggesting we’re still in that consolidation and this should extend for at least half of today, possibly even the whole day if trading remains dull…

There are early signs after this morning’s open that we could see some recycling in one or two currency pairs, certainly a good deal of confusion which should warn us not to get too Dollar bearish too soon. Therefore take your time and be prepared to take advantage when the opportunity finally emerges to see the Dollar resume its move lower. In particular I think that EURUSD has a quite clear structure and support/resistance areas that should guide us through the timing.

I’ll add one more event that, depending on whether U.S. equities follow the Dollar or vice-versa, sees equities solidly on their rally. Friday saw the NASDAQ burst above both the 2007 high and last years high to bring it in sight of clear blue sky. The DOW stalled just shy of last year’s high. However, momentum is firm and true to my long held belief they are going to extend that gain with the DOW & S&P aiming for the 2007 highs… I’m quite happy with the strength as I’ve battled with countless Elliotticians who have been gnashing their teeth and calling equities lower as they look for doomsday. Yes, doomsday will happen... but not yet…

Have a profitable week

Ian Copsey

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Dollar losses need to emerge now or extend the sideways consolidation

noreply@blogger.com (Ian Copsey) — Fri, 03 Feb 2012 01:14:00 +0000

That was disappointing yesterday. The market couldn’t manage to scrape enough bearishness to press the Dollar lower. Instead, the pullback I had anticipated following a minor new low appears to have developed already. If that’s the case then we should see the final push lower today. However, from levels I see right now the higher target for EURUSD just doesn’t seem like a reasonable possibility. The same can be said of USDCHF and probably GBPUSD also. If there is any alternative then it’s going to be continued consolidation last through today, potentially into Monday before the last dip. However, if we do see direct losses today, it is beginning to look as if the Euro will not reach my higher targets and actually end like a damp squid.

All this does still fit into the underlying structure I’m looking at for a pullback after this coming dip, not a particularly deep one, but followed by another round of losses that should last through into March.

USDJPY has moved back into retrograde. We are seeing the anticipated weakness and I still think this will develop over the coming days but we do just have to be aware of continued consolidation but still remain below the 76.35-42 highs. This would still be a bit restrained so don’t get too bullish at this point. The main direction does still seem to be lower – and we just have to be patient.

Directional momentum in EURJPY has slowed also. I can’t see room for excessive moves today but tend to favor another push higher before the downside develops. This does fit in with both EURUSD and USDJPY outlooks.

So, today should probably be a fairly docile one, I suspect a Dollar bearish one as it does need to develop at some point but it doesn’t look like it’ll be a dramatic event…

Have a great weekend

Ian Copsey

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Still further to go, but not directly…

noreply@blogger.com (Ian Copsey) — Thu, 02 Feb 2012 01:41:00 +0000

Yesterday was a lot, lot better. The general structure is developing well and I can see a solution for the slight disconnect between EURUSD and USDCHF. It is also beginning to generate a potential framework for the more medium term outlook, which is still Dollar bearish, but indicating a reasonably shallow pullback once this decline is complete. In fact, this type of development actually suits GBPUSD as well. That is something for the coming week or possible two but something to keep in mind.

As for today there should still be some initial losses to go for the Dollar but not by too much before a correction is due. This will be fairly modest and by the end of the day, perhaps into tomorrow if the correction becomes complicated, we’ll see the final leg lower in this part of the Dollar decline. That should set us up for a Dollar pullback next week.

USDJPY bounced from the top of the 75.94-02 support on the dot to generate the expected correction. There are now two options: a direct move to new lows or a consolidation before the next drop. Perhaps the key point here is that once the next leg lower has completed we shall be due a deeper pullback – but that still implies new historic lows…

The general limited nature of the Dollar losses and the prospect of corrections has really brought EURJPY to a standstill. Well, a standstill within the confines of the 97.03-102.20 range. Obviously there’s plenty of room there for volatility so take care in the middle and look for opportunities at either extreme of the range…

Good trading

Ian Copsey

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Time for Dollar losses to resume?

noreply@blogger.com (Ian Copsey) — Wed, 01 Feb 2012 01:15:00 +0000

Well, that was a bit of a mess yesterday… but then it was always going to be a trying day… However, there were a few pointers that came out of yesterday’s price action that have required a reshaping of the rear guard and what looks to potentially be a resumption Dollar losses.

First & foremost EURUSD saw a deep move lower and stalling in an area that satisfies the pullback in terms of ratios. It could be complete but there is a small risk that we could see one last attempt to reach the maximum pullback.

Next are the developments in the other Europeans. USDCHF did not reach the 0.9080 target but if the Dollar resumes its losses in earnest it certainly won’t stop at 0.9080… If there is any chance it will be that EURUSD decides to choose the snafu option of the mildly deeper correction. However, that said, GBPUSD broke above the all important 1.5774-79 highs. It hasn’t taken off yet but could do… To be honest, I prefer that it does extend gains today and that would imply (as long as the other two keep up) that we’ll begin to see the Dollar begin to wilt today.

Another little clue to look for is from the EURJPY cross. It dipped just a bit more than I thought but within boundaries of a pullback. Now, if this gets much further lower it will begin to suggest a move right back down to the 97.03 lows… However, at this point I can’t see USDJPY carrying that burden so unless EURUSD confounds by dropping the argument does seem more bullish for the cross. I don’t see it making excessive new highs and actually quite limited – but that is more in line with what I see in a push higher in EURUSD and then reversal. While USDJPY can still make downward headway it should be a lot more choppy and with at least one deep pullback.

Thus, cautiously, I feel the argument for Dollar losses to resume today are quite strong… If not then we’re in for some weirdness…

Good trading

Ian Copsey

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The rest of the week is going to need some deep TLC…

noreply@blogger.com (Ian Copsey) — Tue, 31 Jan 2012 02:39:00 +0000

It was a case of the good, bad and the ugly yesterday. Well, not too ugly. The deep pullbacks in EURUSD and USDCHF began to develop well. Actually USDCHF was close to perfect ending only slightly above the retracement target. Where things went a little wrong in particular was EURUSD where price retraced all the way back to the 1.3077 low plus another point. GBPUSD sagged and USDJPY wilted earlier than expected… Overall, looking at the general equilibrium of all currency pairs it certainly looks as if we are at a crucial juncture between marginal extension of Dollar losses and a longer sideways correction. Even if we see new Dollar lows they’ll be limited and the long consolidation develop.

The legacy of all these moves, if a team of lawyers got involved, would be a long, drawn out case that would drag on and on until a crack opened. Actually, I think that probably adequately describes the situation we face now. The high in EURUSD could be considered a completed intermediate move; the low in USDCHF doesn’t really fit into the normal projection ratios and would still risk marginal new lows. Indeed, I think I prefer that. In fact it may even suit the overall situation since the correction in USDCHF is expected to be much shallower than EURUSD.

That sort of leaves GBPUSD hanging rather in the middle and doesn’t seem to have any obvious structure to follow but perhaps that’s the reality given we are, overall, due this period of messy correction… The Aussie appears to be in the same boat. I’d much prefer this to extend gains and it must now or suffer the same fate of messy consolidation.

However, taking up the strain is USDJPY that failed in the pullback but extended losses more directly. I suspect we’re due a deeper pullback but probably not before another bump lower. Overall, rather than the broader consolidation I had been expecting to develop this now looks more like seeing a retest of the 75.57 low… and I wouldn’t be too surprised to see 75.57 again…

Good trading

Ian Copsey

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The Brief Harmonic Daily Forecaster

noreply@blogger.com (Ian Copsey) — Mon, 30 Jan 2012 02:28:00 +0000

The Brief Harmonic Daily Forecaster

Close to the next bigger stalling point… but how close?

noreply@blogger.com (Ian Copsey) — Mon, 30 Jan 2012 02:16:00 +0000

Friday was good and the Dollar’s still on course in its move lower. Indeed, Friday’s lows came tantalizingly close to reaching those targets so the question is whether it’ll move directly through to those targets or see a correction first. I reckon the latter and it could – or should is more appropriate – be quite deep. From this supposition it’ll mean that it’ll take until European and more likely American trading to reach the target projections.

Once reached the implication is for a correction/consolidation and not just a modestly firm pullback but one that should be quite complex. For non Elliotticians complex can form a flat correction – so a retest of the high we should see later today before recycling, an expanded flat which will imply a marginal new high before recycling or possibly a triangle. The bigger headache I have is that the pullback in EURUSD should be quite deep, in USDCHF quite shallow but sideways complex while GBPUSD may well continue to make new highs…

Therefore, today looks like the simplest of all days with the prospect over the rest of the week being for some rather confusing trading.

A word on USDJPY that has obviously taken the bearish option… Something, or someone, appears to have poked a sharp stick up its backside… The past 4 days has seen a combined range that must be the equivalent of 10-12 days of what we had before. It’s broadly following the general Dollar bearish developments and should continue to do so for a while longer. So while there is risk of a minor new low early on we should actually see a pullback into the end of the day. This has made the rally in EURJPY from 97.03 to look more corrective. USDJPY itself has been so complicated over recent months I still prefer to take this one step by step but I’m not so sure the cross has much upside left in it. This could be a crucial indicator to the movements in USDJPY while those in EURUSD appear, at this point until a wheel falls off, to be quite clear.

Have a profitable week

Ian Copsey

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Further Dollar losses to come today

noreply@blogger.com (Ian Copsey) — Fri, 27 Jan 2012 01:35:00 +0000

Dollar losses extended yesterday, a little more directly than I had anticipated but to the sort of areas expected – in EURUSD to the very point. The additional developments have solidified the structure a bit more and barring any consolidation the greater risk is for the week to sign off having seen new lows. However, this should generate a mildly longer lasting correction before the next leg lower but that should come next week.

The early part of the day in Asian trading should see consolidation and a mild extension of the current correction. Possibly this could extend slightly into Europe but I can’t see it lasting through to N.A. open and thus look for the Dollar to resume losses by early in the European day.

USDJPY saw the expected decline and has stalled within 3 points of my target. This is now critical support and the fine line between bullish and bearish. That EURJPY is also hovering around retracement support may not really have too much impact on USDJPY given that EURUSD is expected to rally. However, I feel we should see a recovery but which may well be subdued. I’d like to think that it could make new highs above 78.28 but given the recent aversion to trading USDJPY I’ll remain more prudent. Let’s just say that if USDJPY manages to break above 78.28 I think the argument for having seen a major multi-year low at 75.57 rises significantly.

That’s about it… In summary, selling into this Dollar correction should set us on course for a decline into the end of the day…

Have a great weekend

Ian Copsey

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The Dollar looks extremely vulnerable…

noreply@blogger.com (Ian Copsey) — Thu, 26 Jan 2012 01:57:00 +0000

Yesterday went right down to the line – the FOMC one – and sparked the resumption of Dollar losses. Indeed, the outlook for the Dollar does not look healthy at all and as warned, once the correction had ended the risk was for potentially substantial losses. Therefore, it should now just a matter of the correct pullbacks but within a predominantly bearish direction.

Having said that there are intermediate barriers to watch out for marked by key swing highs/lows that could well contain the move today. The 1.3197 swing high in the Euro is one, the 1.5774-79 highs another. I can’t see that they’ll hold for too long but definitely areas to exercise additional care. Overall I feel this can be quite a direct move.

USDJPY… retested the 78.28 high precisely and dropped. However, if I look at the manner of the rally I can see potential for yesterday’s high to only be part of a stronger rally. There should be support not too far below where we are now so if this doesn’t get below 77.00-20 then be aware of another leg higher… That seems to be echoed to a certain extent in EURJPY but to a lesser extent before a pullback. That could either be generated by a break below 77.00 in USDJPY or that we merely see a holding pattern for USDJPY before stronger gains… Again, this is something to observe and be aware of the alternatives.

Finally, the Aussie is very much in the same position as the Europeans… gains expected here too…

Good trading

Ian Copsey

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Flip of the coin…

noreply@blogger.com (Ian Copsey) — Wed, 25 Jan 2012 02:20:00 +0000

The market sure seems to be bent on selling Dollars… Further marginal new lows yesterday, in EURUSD and USDCHF just about holding to extreme projections while GBPUSD has moved beyond that. Just commenting on currencies alone the depth of correction is pretty much an unknown quantity. The Dollar bearish structure is within an internal correction that can be limited to as little as 23.6% but can go to 85.4%. So from that perspective the range is not too helpful. What’s more, the projections for the next leg lower can be absorbed quite comfortably probably from either extreme of the retracement, though a 23.6%-50% area would be the most likely.

I have actually based my expectations more on the U.S. Indices. Monday’s highs were all projections I’ve had for 2 weeks or so, imply modest pullbacks that should take some while to complete. Hence the call for deeper corrections in Forex.

Today, I am told (as I really don’t take any notice of fundamentals) is the FOMC. Normally that implies pretty dormant trading for the next 20 hours… So from that perspective we can probably take our cue from the release. In terms of Forex we can only but acknowledge that the major direction is Dollar bearish (against the Europeans) and thus any further weakness could well release any restrictions and fuel additional losses that do suggest quite a solid follow through on the downside. Otherwise look for a day or two of continued correction before that move develops.

A word on USDJPY… It saw strong follow-through higher and is close to a pullback itself, but not by too much before it can make it back to the 78.28 high and possibly just above. How it reacts at that point could determine the move into the end of the financial year…

Good trading
Ian Copsey

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Conundrum (mostly) resolved…

noreply@blogger.com (Ian Copsey) — Tue, 24 Jan 2012 02:01:00 +0000

Ouch, yesterday was painful again. To be honest, yesterday’s Dollar lows could still be counted as just a deeper correction in EURUSD. However, the additional follow-through in USDHCF and GBPUSD merely emphasized the task required to get EURUSD (independently) lower to the 1.2443-55 target. That GBPUSD and USDCHF extended their moves is more of an annoyance factor as they are still within the normal projection ranges for this particular area of the structure. That being said, the potential for EURUSD to reach the triangle target while the other two merely correct is just not something that can be justified.

So, it required another review and I can see that we had a string of short Wave C projections in several places which were much shorter than I would normally look for. Taking this into account the projection and retracement ratios were pretty good.

Thus, the Dollar is in a move lower across the Europeans… But… as there always is… I don’t see it extending today – or not by much – literally 10-20 points at most though I doubt we’ll see that. Part of the reasoning for the call for a correction yesterday was down to the U.S. Indices that I felt were close to a high and in need of a pullback. Well, those minor new high targets were met yesterday and these imply a period of sideways consolidation.

Equally, the same should be true of the Dollar. So expect a correction today…

USDJPY – still hanging between two scenarios – but of more importance is the EURJPY cross. Now that I can’t justify stronger losses in EURUSD I have to voice doubts over the cross also. The only possible outcome must be a very weak USDJPY. Well, that needs to be proven first – and of an extent that would drive the cross lower. I’m certainly not going to stick my head out for that one…

Good trading
Ian Copsey

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