Thursday May 20, 2004 - 01:10:02 GMT
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FX-Strategy - www.fx-strategy.com
Forecast for EURUSD May 20th 2004Price: 1.2000
Resistance: 1.2020 ... 1.2040 ... 1.2060 ... 1.2080
Support....: 1.1995 ... 1.1970 ... 1.1940 ... 1.1910
We have seen the expected recovery from 1.1930 which has stalled thus far at 1.2040. We look for further gains today but should see a dip down to 1.1970 in early trading but would look for recovery from there (stops below 1.1930). A move back above 1.2020 should trigger further gains that target 1.2150. However, we may find that price stalls a little way below with resistance also at 1.2105 where a brief correction occurs before the move to the 1.2150 target. Resistance is also at 1.2180.
With the recovery yesterday we are not inclined to a bearish scenario. However, early trading should see 1.2020 hold to prompt a move down to the 1.1970-80 area. However, only below there would cause losses to extend down to 1.1900-10 and breach of this support would be more bearish for a move to 1.1840 and lower.
Elliott Wave Comment:
The break of 1.1940 destroys the expanded flat wave count. We now look at two different alternatives:
First is a flat correction from 1.1758 which would imply a move to 1.2180-1.2210 once again before lower and;
secondly a Wave [B] rally stalling around the Fibonacci 1.2085 resistance and then generating a move lower. We shall update when the picture becomes clearer.
Update May 20th
The structure certainly favors the move back to 1.2180 although we feel it may fall a little short around 1.2150. For short positions is would be safer to place stops above the 1.2210 area which represents wave equality of the initial rally from 1.1758 to 1.2180 from the corrective low at 1.1770.
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