Wednesday January 2, 2008 - 04:14:53 GMT
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Daily Analysis for EURUSD
||The initial downside may well be over and thus we should see a pullback higher â€“ below 1.4682-05|
||In the end the 1.4309 low proved to be the key low in this first decline and from there we have seen a move all the way back to 1.4745. However, this has come with a bearish divergence and I suspect a larger decline. However, we should be at, or close to, an intermediate low. The 1.4576-80 area is critical and while this holds we should see a recovery back above 1.4610-15 and then 1.4643 en route 1.4663-82 at least and at most 1.4705-10. Any earlier test of 1.4527 should provide a base. |
||With the 1.4309 level providing a base we must be aware of sideways to higher moves. However, I suspect a pullback to 1.4527 min and possibly 1.4412-54 before the next leg higher to 1.4811 & maybe more. (2nd January)|
||The high at 1.4745 should spurn a slightly larger decline. If there is any direct move lower then watch the 1.4527 area which could provide a pullback higher. I suspect weâ€™ll get a better selling level closer to the 1.4663-82 area (max 1.4811) and from here (or direct loss of 1.4520) we can then expect the pullback lower to reach 1.4454-76 at least. Take care from there. Next support is at 1.4412 and I suspect we should see no lower than thisâ€¦|
|| It looks like the immediate downside is complete and thus we could see a correction higher or possibly a sideways consolidation. We need to watch the structure to see if this may cause a more complex correction. (2nd January)|
ELLIOTT WAVE COMMENTS
We have seen an ABC structure down to 1.4309 from where price has risen to the area of the prior Wave (b) in 5 waves. This may well be Wave (a) and thus we can expect a correction lower in Wave (b) with a 50% retracement at 1.4527, 61.8% at 1.4476 and a 76.4% at 1.4412.
We need to observe from there and I suspect this will cause a second move higher in Wave (c).
If the cycles have indeed turned lower then we shouldnâ€™t see a move above 1.4966 but we canâ€™t rule out a close test and if this happens in 3 waves then we should also be aware of the risk of a complex correction.
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