Friday December 3, 2004 - 02:09:33 GMT
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Forex: Daily Forecast for the Euro vs U.S. Dollar 3rd December 2004 Price: ... 1.3264
Resistance: 1.3296 ... 1.3320 ... 1.3335 ... 1.3360
Support....: 1.3250 ... 1.3228 ... 1.3182 ... 1.3153
We look for 1.3296 to hold and for losses down to 1.3153-82
The reversal from 1.3383 still has further to go and we feel that early trading should not move any higher than 1.3296. From her we look for a decline down to the 1.3153-82 area - and we favor the lower. Thus buying opportunities will come on a test of 1.3182 (with stops below 1.3150) or on a direct break above 1.3300. From 1.3153-82 we suspect the recovery will make it back to the 1.3250-60 area once again and we feel this may hold.
In line with expectations we saw the 1.3385-95 resistance hold and generate a reversal. The losses have been deep enough to signal that the downside is not yet complete and we therefore look for 1.3296 to hold and for the losses to resume towards the 1.3182 corrective low and we suspect to the 1.3153 Fibonacci support. However, we look for this area to hold and cause a pullback. Thus only below 1.3150 would allow losses to extend towards 1.3065-95.
Elliott Wave Comments:
December 2nd 2004
Price development since the original 1.3329 high has not looked too bullish and could still be part of an expanded flat correction which would have a 38.2% projection at 1.3385. If we see failure here and a move lower than breaks below 1.3312-27 then the odds would then favor amove back to the initial corrective low at 1.3182 and possibly the Fibonacci retracement level at 1.3153. A more strongly bearish medium term scenario would therefore require a break of 1.3150.
December 3rd 2004
The reversal from 1.3383 tends to support the view of an Expanded Flat correction which should imply losses to 1.3153-82 at least. While this would imply further gains to the original 1.9418-25 target and possibly 1.3533 we need to watch price action after the test of the 1.3153-82 area. We cannot ignore that the 1.3383 level was close enough to 1.3418 to satisfy that as a target and with the Key Reversal Day and bearish divergence there is evidence of a larger reversal.
If continued losses are to occur we'd expect the decline to the 1.3153-82 area to be close to 1.3171 and whatever happens we expect a recovery to the 1.3250-60 area. What happens at that point is important and will provide us with the clue for the larger wave structure.
(c) FX-Strategy Inc 2004
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