Thursday September 30, 2004 - 01:28:48 GMT
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FX-Strategy - www.fx-strategy.com
Forex: Daily Forecast for the U.S. Dollar vs Japanese Yen 30th September 2004 Price: 111.10
Resistance: 111.25 ... 111.45 ... 111.70 ... 112.10
Support....: 110.85 ... 110.65 ... 110.35 ... 109.90
Range trading between 110.85 -111.45 expected
The decline to 110.65 has dented the immediate bullish picture but not the longer. We feel that the 110.65 low should complete the correction lower and thus we should see consolidation at a minimum with a minor risk of seeing some further upside. The consolidation would most likely occur between 110.85-111.45. Any break above 111.45 would imply a test around 111.70 again and we must be prepared for this to hold. Further resistance is at 112.10 which would hold if seen directly. Overall, we feel the next day or two will require a little care with a distinct chance of choppiness.
While not expected, the decline to 110.65 appears to have completed the corrective decline. There is only one other scenario that we should be aware of and that would imply a peak around 111.40-45 followed by a second decline down to 110.35. However, if seen we feel this would avoid the consolidation and imply a base for further gains. Thus only below 110.30 would provoke further losses down to 109.60 again.
Elliott Wave Comments:
September 30th 2004
The dip down to 110.65 has forced us to re-evaluate the entire wave structure. We now consider the peak at 111.71 as being a Wave [iii] from the 108.75 low. This represents a 138.2% projection of Wave [i] and within the Wave [iii] we see that Wave (c) was 161.8% of Wave (a). By taking a 38.2% correction of Wave [iii] we achieve a level of 110.65 - which we saw yesterday. We should allow for a 50% retracement implying 110.35 but given the sharp decline in Wave [ii] we suspect a flatter and more shallow Wave [iv] that has either completed but is more likely to develop as a complex correction. Projecting a Wave [v] target we arrive at levels of 112.47 and 112.90 representing 61.8% and 76.4% projections respectively. This should complete Wave A of Wave (III).
(c) FX-Strategy Inc 2004
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