Breaking News

A Little Care Required Initially But A Correction Should Be Due…

By Ian CopseyForexNov 26, 2012 12:46AM ET
A Little Care Required Initially But A Correction Should Be Due…
By Ian Copsey   |  Nov 26, 2012 12:46AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
On the whole Friday went pretty well. The exception was GBP/USD although the break level was very clear… and did break… Now, I had been looking at GBP/USD as a guideline for the correction higher in the dollar against the other two Europeans. It doesn’t necessarily mean that we won’t get a correction higher (indeed, I do think it will happen) but the depth is a little less certain and with momentum quite bearish we should perhaps give thought to whether a mild follow-through early today is also possible.

The puzzle that has arisen is the deeper than expected losses in this foundation for the daily structural outlook. Even looking at minimum projections (and based still on required assumptions) it is causing a slight conflict in terms of the foundation suggesting a stronger final target than the daily structure appears to suggest. Assuming my daily expectation is correct I have to allow for a possible error in the early structure (which I find hard to find…) or possibly there’s a mini-correction within Friday’s drop that would risk slightly stronger extension to the losses. Given the bearish momentum conditions this is a possibility.

Thus, I do recommend caution as we start this week but with emphasis on identifying a (dollar) bottoming pattern and potential reversal signals.

The aussie, after sagging heavily lower last week has recovered suggesting a deep correction only and appears to be back on the basic upside route I have been favouring. There’ll always be potential for this one to sag from time to time, potentially the next time around the daily triangle top. However, the main underlying direction does still seem to be higher.

Finally coming to the yen… Against the dollar it continue to wilt and should remain the basic direction for now. In this part of the structure it has a few alternatives in terms of the pattern of the correction and at this point it is quite open to alternatives. It could even be a very shallow correction but I’d rather not anticipate this outcome given the situation in EUR/JPY. The cross stalled point-perfect at 106.98 on Friday but given the situation in EUR/USD I’m somewhat cautious.

There is a higher projection of which we need to be aware but I can’t see a dramatic extension higher. Whether the cross moves higher to the next projection or drops directly the implication is quite a solid drop, still in a correction only but obviously something has to drive that fall. I don’t see this being USD/JPY. In that case it’s not tough to guess that it must come from EUR/USD

Thus, take care and ensure your trade set ups are strong…
A Little Care Required Initially But A Correction Should Be Due…
A Little Care Required Initially But A Correction Should Be Due…

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Post also to:
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Post 1000
Please wait a minute before you try to comment again.
Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Add Chart to Comment
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
Sign up with Email