The Daily Forecaster

6th June 2008

General Outlook
Yesterday the analyses were mixed overall but the main point of interest was the Euro which bounced perfectly from the 1.5361-83 area. I had indicated that this would mean a recovery to 1.5560 at least and indeed this was seen very quickly, even exceeding that target. The question remains in the currency pair whether the Dollars upside is still intact or whether we should return to the triangle scenario I had originally been considering. Well, if I pushed myself I could still retain a bearish Euro view but this 1.5600 area is very crucial. Most likely it will hold for a correction but the larger picture does still suggest room for further gains. Indeed, short term momentum does still seem pretty firm and this tends to suggest follow-through higher. Beware, it could still be quite choppy but the 1.5760-85 area looks achievable. Now this begs questions elsewhere. The original triangle in the Swissie seems to have been a red herring with the sharp decline from 1.0520. Again, it is poised upon critical support at 1.0351 and any loss will accelerate losses back down to the 1.0265 and 1.0214 areas initially but may just see it push a little further. Dollar-Yen has approached the 106.82-00 target as suggested, though still a little way to go. The 105.30-54 area must support to reach target. If it goes through 107.00 Ill have to review but the next resistance is at 107.48. Finally the Pound continues to defy normal wave relationships and with the decline from 1.9849 being exceptionally choppy I suspect all is not well and this too may be entering into a sideways consolidation. As with the other Europeans it is poised just below the 1.9600-10 resistance. If this breaks then we should move back up to 1.9700-20 before coming back down. So with the non-farm payrolls at hand tonight we shall probably see limited movements until then. Work with breaks and be aware of the support/resistance levels.

Have a great weekend.

Ian Copsey

The art of forecasting

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The Daily Forecaster

Summary
USDJPY
While 105.30-54 supports the rally should reach 106.82-00

Resistance
106.61-92 108.16 107.48 107.00 106.82 106.30-42

Support
105.70 105.54 105.30 105.10 104.50-55 103.86-13

Gains were seen all the way to the 106.20 resistance but this held only briefly and found a high yesterday at 106.42. The wave relationships haven't been great but whichever way I look at this we should see higher levels. There is support between 105.30-54 and while this holds we should see gains to the 106.82-00 ideal target. Here I see a strong argument for a high to be established. Therefore only breach extends the upside to 107.48 and possibly 108.16.

1 EURUSD

Go to detailed analysis
The 1.5600 resistance should cause a pullback but I suspect 1.5481-1.5521 will hold for further

Resistance
1.5785 1.5765 1.5693-17 1.5666 1.5627 1.5600

Support
1.5555 1.5521 1.5481 1.5453 1.5419 1.5263

The 1.5361 support held perfectly and managed to reach the 1.5560 target for the recovery directly. Indeed, with this exceeded there is a strong risk that we shall see the original triangle scenario develop. I feel that we should see a correction first and this should move down to the 1.5521 level minimum and probably 1.5480. While this holds (but bear in mind the next support at 1.5453) I feel the next rally will be stronger and above 1.5600-27 to extend gains further to 1.5719 at least.

1 USDCHF

Go to detailed analysis
While 1.0410-24 caps the risk appears to be turning for losses back to 1.0265-73 & below

Resistance
1.0623 1.0567 1.0526 1.0455-80 1.0430-35

Support
1.0351 1.0331 1.0295 1.0265-73 1.0214 1.0111-34

The sharp reversal from the 1.0520 level breaks down the triangle I had been looking at and does potentially suggest further losses. This will require the 1.0410-24 area to cap and then see breach of 1.0331 which would likely extend losses to 1.0265-95 from where a pullback should be expected. Next support is then found at hte 1.0214 low.

2 GBPUSD

Go to detailed analysis
The bounce from 1.9460 appears to suggest a move back above 1.9600-10 for 1.9760-84

1.0410

Resistance
1.9812-49 1.9760-84 1.9700-20 1.9655 1.9636 1.9600-10

Support
1.9571 1.9536-49 1.9500 1.9460 1.9420 1.9335-63

The 1.9460 low was not expected but is close enough to the 1.9478 support that I feel we are seeing a larger sideways consolidation. Within this there is still room for a pullback from the key 1.9600-10 resistance to reach the 1.9536-49 support. A move from here back above 1.9600-10 would trigger stronger gains through 1.9655 and to 1.9700-20 at least. Take care as this could cause a pullback. The eventual target is at 1.9760-85 but may take a day or two more to reach.

2 AUDUSD
The 0.9525-0.9610 range triggers the next move

Go to detailed analysis

Resistance
0.9747 0.9708-20 0.9694 0.9653 0.9636 0.9610

Support
0.9565 0.9525-30 0.9510 0.9485 0.9430 0.9363

Yesterday's 0.9519 support was broken briefly but the recovery from 0.9510 is encouraging. Even so we need to be careful in case we are seeing a sideways consolidation before the next move. Certainly the bullish structure looks stronger but we must allow for a dip to 0.9525-30 within that consolidation. A break above 0.9610 will trigger follow-through to 0.9636 which I suspect will cause a brief correction before final gains towards the 0.9708-20 target area.

1 USDCAD

Go to detailed analysis
I cautiously retain a bearish outlook for losses below 1.0155 to trigger follow-through to 1.0105

Resistance
1.0376 1.0317 1.0271 1.0241 1.0218

Support
1.0155 1.0140 1.0105 1.0082 1.0021-58 0.9950-70

The additional move to 1.0218 was surprising but I'll stick to the view that a correction is due. Thus while 1.0180 and 1.0218 cap we should see breach of support at 1.0155 to generate follow-through to 1.0105 minimum and probably 1.0082. However, I suspect this stands a good chance of holding with the next support at 1.0058 also strong.

1 EURJPY
Mixed - waiting for breaks

Go to detailed analysis

1.0180

Resistance
167.02 166.56-71 166.34 165.88 165.64 165.36

Support
164.95 164.50 164.20 163.70 163.00-20 162.60

The move back above 162.65 followed by163.20-28 triggered aggressive gains that have burst above the old 1.6446 and 164.96 highs. I am slightly uncertain of the wave structure but note that momentum is generally strained. Never-the-less I suspect we should see a minimum move to 165.83-88 while I cannot rule out a test of 166.56-71. While this is posisble the 164.90-20 area should ideally hold.

Go to detailed analysis

The Daily Forecaster USDJPY

Price 106.15
6th June 2008 Resistance 106.61-92 108.16 107.48 Go to: Summary USDJPY EURUSD USDCHF GBPUSD AUDUSD USDCAD EURJPY 107.00 106.82 106.30-42 Support 105.70 105.54 105.30 105.10 104.50-55 103.86-13

Bias

While 105.30-54 supports the rally should reach 106.82-00

Gains were seen all the way to the 106.20 resistance but this held only briefly and found a high yesterday at 106.42. The wave relationships haven't been great but whichever way I look at this we should see higher levels. There is support between 105.30-54 and while this holds we should see gains to the 106.82-00 ideal target. Here I see a strong argument for a high to be established. Therefore only breach extends the upside to 107.48 and possibly 108.16. 29th May: The 106.82 target is back on track and while the 105.68-00 area should initially cause a pullback the next rally should hit the 106.82 retracement target which should cap or force stronger gains to 107.36-78. 4-Hour Momentum
Trailing Stop RSI Bullish consolidation Bearish divergence

Daily Bullish 1 Med Term Bullish

High-neutral
Direction and timing Finding a high at any time - possibly already passed Bearish divergence

RSI

Daily Bearish

The momentum remains positive and we should await test of the critical 106.82-00 resistance. A cap here would encourage larger losses that would need to break back below 105.80 and 105.50 to cause a deeper move lower. Only an earlier break below 105.10-30 would imply the upside is already complete and cause losses down to 104.50.

Weekly Cycles & Momentum

Risk is still lower into July but from then expect a recovery in the to year-end

Monthly Cycles & Momentum

Med term Bearish

6th June: An earlier reversal level is at 105.10 and a stronger one at 104.50 which would cause losses to the 103.86 area but this may hold for a correction before the next leg lower towards the 102.56 area.

The weekly cycle should only have limited influence over the year with monthly cycles pointing sharply lower

Elliott Wave:
4th June It looks as if yesterdays 103.86 low provided the low in Wave (b) being a 61.8% retracement. A wave equality target in Wave (c) rests at 107.00 and just 18 points above the daily 50% retracement in Wave (iv) at 106.82. 6th June I still cant say the wave relationships are 100% clear but the strength has taken us to within 42 points of the ideal 106.82 target. If we take last nights high as a Wave iii of Wave (c) then a 50% retracement is at 105.30 (58.6% at 105.10) and while this holds the final leg should reach target. Only break above would imply a much more bullish structure with an alternative 176.4% projection in Wave iii- at 107.48.

Ian Copsey 2008

The Daily Forecaster EURUSD

Price 1.5589
6th June 2008 Resistance 1.5785 1.5765 1.5693-17 Go to: Summary USDJPY EURUSD USDCHF GBPUSD AUDUSD USDCAD EURJPY 1.5666 1.5627 1.5600 Support 1.5555 1.5521 1.5481 1.5453 1.5419 1.5263

Bias

The 1.5600 resistance should cause a pullback but I suspect 1.5481-1.5521 will hold for further gains
The 1.5361 support held perfectly and managed to reach the 1.5560 target for the recovery directly. Indeed, with this exceeded there is a strong risk that we shall see the original triangle scenario develop. I feel that we should see a correction first and this should move down to the 1.5521 level minimum and probably 1.5480. While this holds (but bear in mind the next support at 1.5453) I feel the next rally will be stronger and above 1.5600-27 to extend gains further to 1.5719 at least. 6th June: The solid bounce from 1.5361 is more encouraging for the bulish stance though the 1.5600-27 level needs to be broken first. Once this occurs we should see an eventual move to the 1.5765-85 area before reversing lower. 4-Hour Momentum
Trailing Stop RSI Bullish consolidation Overbought

Daily Bullish 1 Med Term Bullish

Daily Cycles & Momentum

It may have been that Direction and timing we have just seen the high RSI Neutral

Daily Bearish

While the stronger argument is bullish there does remain one final (weak) argument for the downside. This will require the resistance already tested at 1.5600-10 to cap. A break from there below 1.5521 followed by 1.5450-80 would raise the argument for losses back to 1.5363 initially but should then see a correction. Overall this scenario would imply a retest at the 1.5283 low.

Weekly Cycles & Momentum

Currently finding a high with a strong bearish divergence

Monthly Cycles & Momentum

Med term Bearish

5th June: We are now testing critical supports but only below 1.5360 suggests a more direct attack back at the 1.5283 low and possibly even further to 1.5188 while a larger target is at 1.5082.

The monthly cycles appear to be lower for some while to come and therefore the current strength is corrective

Elliott Wave:
6th June: We are faced with two scenarios: (1) That the 1.5361 low was a 261.8% projection in minor Wave iii within a 5 wave move lower. A 50% correction from there has already been exceeded at 1.5560 but has stalled at the 58.6% retracment which is marked by the 1.5600 pivot area. This then needs to see a move below the 50%-61.8% retracment between 1.5450-80 to generate Wave a of Wave v lower to teh 1.5363 level again. (2) That the 1.5363 low was the end of Wave ^b of a triangle with a break above 1.5600-26 signaling gains to the 61.8%66.7% projection in Wave ^c at 1.5765-85. This currently looks a more likely scenario.

Ian Copsey 2008

The Daily Forecaster USDCHF

Price 1.0384
6th June 2008 Resistance 1.0623 1.0567 1.0526 Go to: Summary USDJPY EURUSD USDCHF GBPUSD AUDUSD USDCAD EURJPY 1.0455-80 1.0430-35 1.0410 Support 1.0351 1.0331 1.0295 1.0265-73 1.0214 1.0111-34

Bias

While 1.0410-24 caps the risk appears to be turning for losses back to 1.0265-73 & below
Gains were initially seen yesterday but the failure at 1.0520 and break below 1.0425 has broken the triangle and it will be better to retain an open mind here. While the move does look more bearish there is one last argument for renewed strength and this will require the 1.0331-51 area to remain intact then cause a reversal back above 1.0410-24. If seen then the argument turns higher again for a move back to 1.0455-65 initially and probably back towards the 1.0526 high - possibly 1.0623. 6th June: Failure at 1.0520 does cause some doubts over the bullish structure but there is one last scenario remaining that would mean the 1.0331-51 area supports for a stronger move back above 1.0623 for 1.0650 and probably 1.0732. 4-Hour Momentum
Trailing Stop RSI Bullish consolidation Neutral

Daily Bullish 2 Med Term Bullish

Daily Cycles & Momentum

Direction and timing Already seen the low?

RSI

Neutral

Daily Bearish

The sharp reversal from the 1.0520 level breaks down the triangle I had been looking at and does potentially suggest further losses. This will require the 1.0410-24 area to cap and then see breach of 1.0331 which would likely extend losses to 1.0265-95 from where a pullback should be expected. Next support is then found at hte 1.0214 low.

Weekly Cycles & Momentum

Higher - cycles have recently found major low and provide a lift for several months

Monthly Cycles & Momentum

Med term Bearish

6th June: The wave structure is quite complicated but until we see it break above 1.0526 again there is risk for a renewed attempt lower towards the 1.0214 low and then the 1.0111-34 area.

The monthly cycles appear to be bearish for some years and therefore this year's recovery is corrective only

Elliott Wave:
6th June: The failure at 1.0520 has seen a decline that caused the prior triangle scenario to break down. Now it could be that we have just seen an expanded flat correction from the original 1.0489 high and if this is the case then it formed Wave i of a new Wave -a- and the 1.0331-51 area should then be the Wave ii. If so the 138.2% projeciton in Wave iii is at 1.0650 and the 176.4% at 1.0732. Break above 1.0424 woudl argue for this to occur. The alternative is that we have seen a Wave -x- at 1.0526 and thus we could still be seeing a second ABC decline that would argue for amove to the 1.0214 area initially and probably to the 161.8% projection in Wave -c- at 1.0111 which is just above the 50% correction in the larger pullback at 1.0134.

Ian Copsey 2008

The Daily Forecaster GBPUSD

Price 1.9586
6th June 2008 Resistance 1.9812-49 1.9760-84 1.9700-20 Go to: Summary USDJPY EURUSD USDCHF GBPUSD AUDUSD USDCAD EURJPY 1.9655 1.9636 1.9600-10 Support 1.9571 1.9536-49 1.9500 1.9460 1.9420 1.9335-63

Bias

The bounce from 1.9460 appears to suggest a move back above 1.9600-10 for 1.9760-84
The 1.9460 low was not expected but is close enough to the 1.9478 support that I feel we are seeing a larger sideways consolidation. Within this there is still room for a pullback from the key 1.9600-10 resistance to reach the 1.9536-49 support. A move from here back above 1.9600-10 would trigger stronger gains through 1.9655 and to 1.9700-20 at least. Take care as this could cause a pullback. The eventual target is at 1.9760-85 but may take a day or two more to reach. 5th June: The break down below 1.9596 does seem to argue for more persistent losses. If there is any chance of a larger recovery then we need the 1.9449-78 area to support with a move above 1.9630 seeing gains. 4-Hour Momentum
Trailing Stop RSI Bearish trend Low-neutral

Daily Bullish 1 Med Term Bullish

Daily Cycles & Momentum

Direction and timing Under review

RSI

Low-neutral

Daily Bearish

The loss of 1.9478 only permitted limited losses to 1.9460 before springing back higher. While I prefer a bullish stance there is one last scenario that would allow the downside to develop once again. This would require the 1.9600-10 area to cap and for a break below 1.9536 which would then provoke follow-through to 1.9500 and the 1.9460 low en route 1.9420 and probably the 1.9335-63 lows. 6th June: Yesterday's recovery provides a warning that we may not be in a direct downtrend. Thus, only while 1.9600-10 caps and we see a move below 1.9460 would I expect follow-through to 1.9335-63 and probably lower.

Weekly Cycles & Momentum

Lower - into April next year though there should be an intervening recovery

Monthly Cycles & Momentum

Med term Bearish

Monthly cycles are bearish into early next year

Elliott Wave:
6th June: The 1.9478 support represented a 76.4% retracement to the rally from 1.9363 to 1.9849. The small breach to 1.9460 yesterday may well have just been a minor overshoot and thus it could be Wave ^b of a triangle Wave (b). If this is the case we should see break back above the 1.9600-10 pivot area and if so then the 61.8%-66.7% projection in Wave ^c rests at 1.9760-85. If the downside is still in play then it may be that we are still in the midst of a Wave c (of Wave iii) decline. Within this the 50% retracement in Wave iv would be at 1.9600. Thus this area needs to cap to retain the bearish structure. Break below a 50%-61.8% retracement to yesterday's recovery at 1.533649 would resurrect the downside for a move below 1.9460 and probably to the 1.9335-63 lows initially.

Ian Copsey 2008

The Daily Forecaster AUDUSD

Price 0.9597
6th June 2008 Resistance 0.9747 0.9708-20 0.9694 Go to: Summary USDJPY EURUSD USDCHF GBPUSD AUDUSD USDCAD EURJPY 0.9653 0.9636 0.9610 Support 0.9565 0.9525-30 0.9510 0.9485 0.9430 0.9363

Bias

The 0.9525-0.9610 range triggers the next move

Yesterday's 0.9519 support was broken briefly but the recovery from 0.9510 is encouraging. Even so we need to be careful in case we are seeing a sideways consolidation before the next move. Certainly the bullish structure looks stronger but we must allow for a dip to 0.9525-30 within that consolidation. A break above 0.9610 will trigger follow-through to 0.9636 which I suspect will cause a brief correction before final gains towards the 0.9708-20 target area. 4th June: Price action has been exceptionally erratic but the 0.9485 level was a last resort support and this still maintains the risk of a move to 0.9666 and maximum 0.9720. 4-Hour Momentum
Trailing Stop RSI Bullish consolidation Neutral

Daily Bullish 1 Med Term Bullish

Daily Cycles & Momentum

Direction and timing Finding a high this week? Bearish divergence

RSI

Daily Bearish

Yesterday's losses were slightly strongerthan anticipated but the recovery from 0.9510 is encouraging more for the upside. Even then there is risk of a sideway consolidation that on a break of 0.9565 would allow slippage to 0.9525-30. Thus a stronger bearish stance will require break of 0.9525 which, if seen, would accelarate losses through 0.9510 and 0.9485 en route 0.9430 minimum and probably 0.9363. 4th June: The 0.9500 level has broken but only just and the lack of follow-through may mean we need to wait for a test of 0.9666-0.9720. An earlier drop below 0.9485 would trigger stronger losses to 0.9345 and 0.9274-90.

Weekly Cycles & Momentum

Lower - probably down into the 4th quarter

Monthly Cycles & Momentum

Med term Bearish

Monthly cycles appear to be bearish for quite some time

Elliott Wave:
4th June: How terribly frustrating price action has been. This mornings low at 0.9485 represents a possible deep 58.6% retracement in Wave iv. This would see a 66.7% projection in Wave v at 0.9726 which is close to the 161.8% projection in Wave cand the 76.4% Wave v- target at 0.9720. Any earlier drop below 0.9485 would signal the end of the uptrend and cause stronger losses, initially to 0.9345 and then the 0.9274-90 lows. 6th June The low at 0.9510 may well have been a deep Wave b and thus retain the risk of seeing Wave c resume higher. The intermediate risk to this is that Wave b could develop in a triangle which woudl have a base at 0.9525. Back above 0.9610 would see a minor 176.4% projection in minor Wave iii at 0.9636 and following a Wave iv should then attack 0.9666 and probably 0.9708-20.

Ian Copsey 2008

The Daily Forecaster USDCAD

Price 1.0167
6th June 2008 Resistance 1.0376 1.0317 1.0271 Go to: Summary USDJPY EURUSD USDCHF GBPUSD AUDUSD USDCAD EURJPY 1.0241 1.0218 1.0180 Support 1.0155 1.0140 1.0105 1.0082 1.0021-58 0.9950-70

Bias

I cautiously retain a bearish outlook for losses below 1.0155 to trigger follow-through to 1.0105 and 1.0082
Yesterday's blip higher to 1.0218 was not quite within my expectations. However, with a bearish divergence formed in the hourly chart I suspect we shall have to wait for the next move above 1.0218. Thus only an earlier break of yesterday's high would extend gains above 1.0241 and 1.0271 and to the next resistance at 1.0317-25 4-Hour Momentum
Trailing Stop Overbought Bullish trend Overbought

Daily Bullish 2 Med Term Bullish

Daily Cycles & Momentum

Broadly higher and Direction and timing waiting for a low to be put in place RSI Overbought

6th June: While we have seen a breach of 1.0190 I still want to be cautious and only followthrough above yesterday's high would imply an earlier test of the 1.0317-25 resistance.

Daily Bearish

The additional move to 1.0218 was surprising but I'll stick to the view that a correction is due. Thus while 1.0180 and 1.0218 cap we should see breach of support at 1.0155 to generate follow-through to 1.0105 minimum and probably 1.0082. However, I suspect this stands a good chance of holding with the next support at 1.0058 also strong.

Weekly Cycles & Momentum

Higher - Any move lower appears to be a correction within a larger recovery

Monthly Cycles & Momentum

Med term Bearish

5th June: The upside still looks to have stronger legs and should mean we have seen the major low. Only a break back below 1.0000 would undermine the up move for a correction back to 0.990550.

Data too short and cannot be certain but suspect lower

Elliott Wave:
5th June: The direct rally to the 1.0190 target suggests that we may have seen a 261.8% projection in Wave (iii). This comes from the fact that I feel the 0.9817 low was a larger daily Wave (ii) and thus we should see a move back to the 1.0325-76 are in Wave (a) of Wave (iii). This should imply a 5-wave rally and thus we should now see Wave (iv) correct around 38.2%41.4% to 1.0035-50 before higher again. 6th June I am treating the additional move to 1.0218 as a slightly different extension in Wave iii and thus the correciton in Wave iv should be at a minimum 41.4% retracement at 1.0105 and probably the 50% retracement at 1.0082. Also note the 58.6% retracement at 1.0058.

Ian Copsey 2008

The Daily Forecaster EURJPY

Price 165.35
6th June 2008 Resistance 167.02 166.56-71 166.34 Go to: Summary USDJPY EURUSD USDCHF GBPUSD AUDUSD USDCAD EURJPY 165.88 165.64 165.36 Support 164.95 164.50 164.20 163.70 163.00-20 162.60

Bias

Mixed - waiting for breaks

The move back above 162.65 followed by163.20-28 triggered aggressive gains that have burst above the old 1.6446 and 164.96 highs. I am slightly uncertain of the wave structure but note that momentum is generally strained. Never-the-less I suspect we should see a minimum move to 165.83-88 while I cannot rule out a test of 166.56-71. While this is posisble the 164.90-20 area should ideally hold. 6th June: Yesterday sw a burst back above the 164.96 high. I feel we should be careful at 165.8388 which could cap. Only above extends to 166.56-71 and beyond there to 167.55-60. 4-Hour Momentum
Trailing Stop RSI Bullish consolidation Overbought

Daily Bullish 1 Med Term Bullish

Daily Cycles & Momentum

Direction and timing Lower

RSI

Bearish divergence

Daily Bearish

Given yesterday's burst higher we should be cautious of the downside unless there is a stronger signal. Note resistance at 165.83-88 and 166.65-71. Only a stronger reaction from one of these resistance points back below 164.96 and 164.46 would probably lead to additional losses.

Weekly Cycles & Momentum

Lower - with losses expected to continue for a little while yet

Monthly Cycles & Momentum

Med term Bearish

6th June: I still feel a cap is imminent but would like to see this confirmed. A break below 164.46 would assist while below 161.73 provides the final confirmation.

We appear to have just met a major monthly high which implies a large pullback

Elliott Wave:
6th June: Yesterday's rally obviously requires a rethink. I can see a wave equality target in Wave (c) at 167.55-60 but within the daily chart a 76.4% projection in a large triangle suggests an initial barrier at 165.83-88. Thus I prefer to wait an observe to see how the next move comes. Within the recovery from 161.73 I can also see a potential 76.4% projection at 166.34 while a stronger internal 176.4% projection in Wave iii rests at 166.5671. Back below pivot supports at 164.96 and 164.46 would hasten a retreat to the Wave (b) low at 161.73.

Ian Copsey 2008