Thursday January 31, 2008 - 04:57:15 GMT
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Daily Analysis for GBPUSD
||I suspect we may have seen the top but take care and watch for a break below 1.9810 & 1.9727|
||We saw a peak right in the middle of the 1.9954-62 resistance with bearish divergences in hourly and 4-hour charts. I suspect at the very least we shall see a correction lower. Therefore only consider the chance of additional gains if we see a move back above the 1.9890-12 area. If seen we should find the rally move back to the area of yesterdayâ€™s high but should then see a correction lower. It would imply overall that there is room for a test of the 2.0083 Fibonacci retracement.|
||Iâ€™ll take the 1.9335 low as the end of this part of the decline and this should lead to a week or so of upward correction towards 1.9954 and at most 2.0083. However, that area should cap. (23rd January)|
||The reversal from the 1.9954-62 range amid bearish divergences is encouraging. It should mean that at the very least we get a correction lower and may well imply stronger losses. There is resistance at 1.9890-12 and while this caps we should see loss of the 1.9810-20 area which would then extend losses down to the 1.9850-80 congestion and probably further to the 1.9727 corrective low. Take care there as this may cause a pullback. Next support is seen at 1.9645. |
||We are now approaching the preferred resistance at 1.9954-62 and while this caps we will either see a sideways correction and possibly the resumption of the downtrend to below 1.9335 â€“ target around 1.85-87. (30th January)|
ELLIOTT WAVE COMMENTS
Price has continued to stretch higher and has fallen just short of the 41.4% retracement in Wave (iv) at 1.9954. Also note that a 161.8% projection in Wave c lies at 1.9962.
Thus I suspect we shall be seeing a peak in this area and for losses back to the 76.4% retracement at least. (With a peak at 1.9954 this would imply 1.9481.)
A base here would suggest a Wave (iv) coming as a triangle. A retest of the 1.9335 low would then be counted as Wave a of Wave (v) with a 66.7%-76.4% projection in Wave (v) targeting the 1.85-1.87 area.
Only above 1.9970 would suggest a deeper Wave (iv) to the 50% retracement at 2.0083.
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