Wednesday December 19, 2007 - 03:29:17 GMT
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Daily Analysis for USDCAD
||Mixed â€“ waiting for breaks though with a slightly more bearish preference|
||While price did manage to break above 1.0101-25 it then stalled at 1.0139. There are a few patterns that are possible here and we need watch key levels. The first has been tested this morning at 1.0036-39. While this holds there is risk of a return higher through 1.0170-75 and then to extend towards 1.0090 and 1.0120-25. This could well hold in a sideways consolidation. Only breach extends to yesterdayâ€™s targets at 1.0156-91.|
||There has been no convincing break either way but to generate a stronger bullish move we require a move above 1.0175-90 and then 1.0125 to retest 1.0247 â€“ above extends to 1.0390 & above. (19th December)|
||The sharp downward reaction from the 1.0139 high seen yesterday does seem to put the greater risk on a bearish stance. However, to avoid further consolidation/correction we really need a breach of 1.0036. If seen it should force a retest and break of the 1.0004-10 lows and down to 0.9961 at least. There is one scenario that would imply that as a low and force a retest of 1.0139. However, I would actually prefer the direct bearish view that would generate losses to the 0.9905-12 area. |
||Yesterdayâ€™s decline with a deep daily bearish divergence may mean a larger pullback. We need a move below 0.9905 to confirm a larger correction to 0.9652 at least and possibly 0.9511. (19th December)|
ELLIOTT WAVE COMMENTS
We remain with the different possibilities of an expanded flat correction or that we are seeing a larger high and thus a deeper correction.
If this is the expanded flat then we need a rally to take out 1.0120-25 (possible triangle peak) which would then trigger stronger follow-through to the 1.0247 high initially but this would then be more bullish for further gains in Wave (v).
With a daily bearish divergence I still tend to prefer a bearish stance within a pullback to the rally from 0.9056. This would imply, on a loss of the prior Wave b at 0.9921, further losses to the 50%-61.8% retracement at 0.9652 and 0.9511 at least.
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