Thursday October 7, 2004 - 01:06:54 GMT
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Forex: Daily Forecast for the U.S. Dollar vs Swiss Franc 7th October 2004 Price: 1.2655
1.2660 ... 1.2680 ... 1.2710 ... 1.2740
1.2640 ... 1.2625 ... 1.2598 ... 1.2565
While 1.2625-40 holds we remain cautiously bullish to 1.2745-75 but note that a reversal lower is due
Gains stalled at 1.2682 yesterday and while the correction was quite robust, while the 1.2625-40 area holds we continue to be cautiously bullish for an eventual test of 1.2745 at least and possibly 1.2775. (The lower area does look more likely.) However, we must also be aware of the possibility of a period of range trading ahead of any break higher and thus for today only buy on a break above 1.2680 or on a second test of 1.2640 with stops below 1.2620.
While the gains seen yesterday are more in line with our short term bullish view we must also acknowledge that the peak at 1.2682 did satisfy the minimum to complete this initial rally. However, we will wait for confirmation before jumping in on this one. Thus look to sell only on a test of 1.2740 (with stops above 1.2780) or on a direct break of 1.2620. Retracement would be expected to eventually reach the 1.2535-65 area. Initial support is at 1.2598 corrective low.
Elliott Wave Comments:
4th October 2004
We consider the decline to 1.2443 completed Wave iii of Wave (c) lower. Thus resistance in Wave iv should cap around the 1.2520-45 area but we would then expect further losses in Wave v to reach the 1.2375-00 at a minimum and possibly as deep as 1.2310, these representing Wave (c) being equal to Wave (a) and 138.2% of Wave (a) respectively. From these lows we anticipate a stronger move higher.
7th October 2004
With the break back above 1.2653 the implication is that the downside was complete at 1.2443. From there we have seen the development of five waves higher although we still consider the fifth wave as incomplete and should still test the 1.2745-75 area. This should form Wave [a] of the first part of the rally and be followed by a Wave [b] lower that should retrace to the 1.2535-65 area.
(c) FX-Strategy Inc 2004
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