Thursday December 16, 2004 - 01:33:26 GMT
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Forex: Daily Forecast for the Euro vs U.S. Dollar 16th December 2004 Price: ... 1.3401
Resistance: 1.3420 ... 1.3446 ... 1.3468 ... 1.3495
Support....: 1.3383 ... 1.3360 ... 1.3338 ... 1.3300
Cautiously we feel an additonal high is due before a larger reversal
We saw strength as anticipated but this has extended even higher than the 1.3408 resistance highlighted yesterday. At this point we do not consider this as a resumption of the uptrend but more as part of a larger sideways correction. The 1.3441 peak seen yesterday may well have completed the move but we tend to feel there is further to go and while 1.3383 holds we see potential to the 1.3454-68 area at the very least. We need to be a little flexible at this point since while it could provide a high for th is move, we also see potential for the rally to reach the 1.9495-1.9528 area before exhaustion. Thus a stronger bullish stance requires a break above 1.3528 which could then imply a move through to 1.3594.
Good strength seen yesterday but we feel this is merely part of a larger sideways correction and thus we should be looking to identify a top. Here we need to be a little flexible. There is resistance at 1.3454-68 which could provide this top but we tend to feel a rally as deep as 1.3495-1.3528 is possible before a peak is seen. From there a move back below 1.3420-40 will then confirm further losses that could decline to the 1.3325 area.
Elliott Wave Comments:
December 16th 2004
The rally higher yesterday may imply the 1.3138 low completed the Wave [b] retracement. However, we tend to feel that a larger sideways pattern is more likely and given yesterday's high at 1.3441 this would imply either a Flat correction or an Expanded Flat correction. This being the case we can point to 1.3454-68 as a potential cap (in a Flat) with the 1.3495-1.3528 also implied - the 1.3522 level suggesting a 23.6% Expanded Flat. Although not expected there is also resistance at 1.3494 being a 38.2% Expanded Flat. Either of these patterns would imply a Wave -c- lower that should have a minimum target at 1.3138 and we should rule out the 1.3062 original favored retracement target.
(C) FX-Strategy Inc 2004
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