Friday January 21, 2005 - 01:03:38 GMT
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Forex: Daily Forecast for the U.S. Dollar vs Japanese Yen 21st January 2005 Price:
Resistance: 103.60 ... 103.83 ... 104.13 ... 104.34
Support....: 103.10 ... 102.75 ... 102.40 ... 102.05
Slightly mixed - looking for breaks
Our bearish stance took a blow yesterday with the break above 103.19-40 and while we can still see a bearish wave count this is quite stretched. Be aware that if the Dollar remains above 102.40 and breaks above 103.60 we should see a sharp rally which targets the 105.17 level at least and we suspect 105.44. Possible intermediate stalling points are seen at 104.13 and 104.34.
The rally to 103.59 concerns and risks the bearish scenario breaking down. There is one last posisble count that would keep the downside intact and this requires the 103.59 level to hold. From here a break below 102.75-103.10 will assist but a break of 102.40 will bring greater comfort and we would then look for losses to reach the 101.82-102.13 area. If seen this could stall the downside today. Further support is at 101.36 and then 100.94.
Elliott Wave Comments:
21st January 2005
If the wave structure is still bearish then we feel that the low at 101.67 can be counted as Wave (a) of Wave (iii) with yesterday's move to 103.59 being a deep Wave (b). This would imply direct losses from here that should reach the 100.56 area first to complete Wave (iii) and after a correction in Wave (iv) the final dip to 99.75 can be expected.
However, the bearish count is quite stretched and although this deep Wave (b) has been seen before it is unusual in the Yen. Thus the alternative (and keep in mind the bullish daily divergence) is that the 101.67 low formed Wave B of a flat correction in Wave [iv] of larger degree. This would imply a move back to 105.44 initially (being a 261.8% projeciton of Wave -i-) and then after a pullback we can expect a rally to 106.19 again at least and we should keep in mind the old target of 106.76 being a 50% retracement in daily Wave [iv].
(c) FX-Strategy Inc 2005
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