Tuesday January 11, 2005 - 00:50:22 GMT
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Forex: Daily Forecast for the U.S. Dollar vs Japanese Yen 11th January 2005 Price:
Resistance: 104.35 ... 104.55 ... 104.80 ... 105.17
Support....: 103.80 ... 103.45 ... 103.30 ... 102.93
Slightly mixed - waiting for breaks
Yesterday didn't see the break higher expected and the breach of 104.27 has led to further losses. We see this testing the 103.80-90 area at least but should cause a small pullback to 104.25-30 at least. From here we need to observe with any bullish scenario requiring a break above 104.35-55 to generate a recovery to 104.80 at least. Above this higher level would allow price to extend gains above 105.17 towards the 105.50-60 area at least. Further resistance is at 106.76.
Breach of the 104.27 support gives a rather heavy look to price with a Head & Shoulders pattern evident in the hourly charts - the neckline around 103.80-90. Thus we expect this neckline to be tested quite early today but we feel it will hold on first test. While price remains below 104.25-30 there remains a moderately strong risk of a break of the neckline and a dip to the 103.45-50 area at least. This is the last area of support and if this breaks look for losses to extend down to the 102.50-76 level at least. Further support is at 102.30 and the 101.82 low.
Elliot Wave Comments:
10th January 2005
We are still faced with two scenarios here - the first looking for a Wave [c] rally to 106.76 to complete a 50% retracement of the daily Wave [iii] decline from 111.71, and the second scenario calling for a peak in the 105.50-84 area to provide Wave [c] of a triangle from 101.82. Given the downward daily cyclic pressure beginning to grow we are more in favor of the first scenario and this being the case, we'd look for a move back down to 102.75-00 in Wave [d] of the triangle.
11th January 2005
The wave count is proving elusive and has several potential scenarios within a corrective structure. It is possible that the 105.17 high satisfied Wave [c] of the triangle and would then imply losses down to 102.50-76. However, until the 103.45-50 area breaks we can also still see potential to 105.50-60 in a complex pattern though 106.76 appears further away.
(c) FX-Strategy Inc 2005
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