Sunday January 23, 2005 - 22:23:34 GMT
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Forex: Daily Forecast for the Euro vs U.S. Dollar 24th January 2005 Price:
Resistance: 1.3068 ... 1.3106 ... 1.3135 ... 1.3170
Support....: 1.3024 ... 1.2993 ... 1.2976 ... 1.2950
Mixed - waiting for breaks
The break of 1.3042 has alerted us to the possibility of a slightly more bullish short term stance. We see support at 1.2993-1.3006 and while this holds the downside a break back above resistance between 1.3044-71 would provide a more bullish tone with a minimum move to 1.3135 and we suspect to 1.3150-70 which we feel should hold. Only a break of this higher level would provoke gains to follow-through back to the 1.3291 peak at least.
The break above 1.3042 is a bit damaging to the bearish view and before returning to looking for further losses we would prefer a break of the 1.1993-1.3006 support. Should this break occur then we would look for follow-through to 1.2946-55 at least and probably an attack on the 1.2921 low. Further support and major support is around 1.2800-46.
Elliott Wave Comments:
24th January 2005
We need to approach the picture here with thought. In the 8-hour chart there are two scenarios labeled to retain the thoughts given last week. However, we do need to consider a third. Firstly it is still unclear whether the 1.3291 peak was Wave (b) or Wave (iii) lower or whether it was actually Wave (iv).
If 1.3291 was Wave (b) then we consider the low at 1.2921 as the end of Wave (iii) though the ideal target should have been 1.2846-64. The fact that the losses so far ended at 1.2921 could mean that the alternative with 1.3291 being Wave (iv) is more likely and as such we are seeing (or have completed) Wave (v) lower. The traditional target for Wave (v) could either be a 61.8% projection which rests at 1.2894 or a 76.4% projection which ends at 1.2800.
Now with this in mind we have to decide whether the 1.2921 low actually satisfied the 61.8% target but fell short by 30 points or whether it represented Wave -a- of Wave (v). The latter would imply that could rally as high as 1.3150-70 to complete Wave -b- and then expect a Wave -c- to then target the 1.2800 area.
This would imply that any break above 1.3150-70 would imply the end of Wave (v) was seen at 1.2921 and thus a recovery to 1.3291 (50% retracement) or 1.3385 (691.8% retracement and pivot resistance) can be seen before further losses. If anything, the daily cycles would tend to suggest this latter view.
(c) FX-Strategy Inc 2005
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