Wednesday October 20, 2004 - 01:23:11 GMT
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FX-Strategy - www.fx-strategy.com
Forex: Daily Forecast for the U.S. Dollar vs Japanese Yen 20th October 2004 Price: 108.45
108.50 ... 108.70 ... 108.85 ... 109.10
108.25 ... 107.95 ... 107.60 ... 107.30
Look for an early correction to 108.70-85 followed by further losses to 107.60
The bullish divergence broke down with the decline to 108.25 seen yesterday and this has a concerning edge to it. For now we feel that early trading can take price back up to 108.70-85 but this should hold. Thus only a direct break of 108.85 would allow follow-through to 109.10 while break there is required to trigger stronger gains back to 109.45-60.
A breakdown of a bullish divergence tends to suggest potential for down trends. A bit early to confirm but the nature of yesterday's losses tends to imply further losses. Thus, while we expect an early correction to 108.70-85 look to sell there for losses to make their way down to 107.95 and possibly the 107.60 secondary target. If seen there is a good chance of a correction from there.
Elliott Wave Comments:
October 18th 2004
The peak at 110.20 finally completed Wave -iv- of the Wave (c) decline and we now have targets from the Wave (a) lower to 109.78 and internally from 111.45 which both target the 108.35 level as the completion of the move lower. This would then appear to complete Wave C of a larger daily triangle.
October 20th 2004
Given the break below 108.35 we feel there is a risk of follow-through to the lower target at 107.60 which represents a Wave -c- target of 138.2% of Wave -a- and also a triangle Wave (C) projection of 61.8%.
(c) FX-Strategy Inc 2004
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