Sunday October 24, 2004 - 08:46:46 GMT
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Forex: General Market Conditions for the Four Majors
Over the past week we have had to adjust our medium to long term outlook and during this process there is a need to identify a new structure, how that has developed and the related waves within that structure. Unfortunately this can take a few days to assimilate and we have taken an additonal hard look at the daily and weekly pictures. This has given us some further clues as to the coming moves and overall, while the Euro & Swissie have reached the edge of tolerance of a Dollar bullish view, we actually feel that the weight of evidence now suggests some complex corrections within the weekly and daily timeframes.
Thus we are tending to prefer a Dollar bearish scenario for a while but within this the evidence appears to suggest that we should see an intermediate pullback this week before further losses can be seen. Specifically we see Dollar support at 1.2690 Euro, 1.2100 Swissie and 106.60-80 Japanese Yen while the peak in the Pound on Friday at 1.8316 appears to have satisfied the current rally. Over this week we will expect to see the Dollar pullback reach 1.2525-65 Euro, 1.2315-80 Swissie, 1.8080-1.8135 Pound and up to 108.25-75 Yen. As price develops we shall fine-tune how this may occur.
While this is our preferred view we must also be practical and with price beginning to show signs of a clear trend, we should respect any breaks of our near term support mentioned above which would allow the move lower accelerate towards the medium terms targets. These are covered in the individual analyses.
Have a profitable week.
(c) FX-Strategy Inc 2004
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