Tuesday January 25, 2005 - 01:06:49 GMT
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FX-Strategy - www.fx-strategy.com
Forex: Daily Forecast for the Euro vs U.S. Dollar January 25th 2005 Price:
Resistance: 1.3068 ... 1.3099 ... 1.3126 ... 1.3150
Support....: 1.3028 ... 1.3004 ... 1.2968 ... 1.2946
Mixed - waiting for breaks
Yesterday saw the Euro test the minimum upside target at 1.3135 and has pulled back since. This still hasn't fully clarified the picture. While we can still see potential for a dip to the 1.2968-1.3004 area, this could still be seen as a pullback within a bullish scenario to 1.3175 at least. This level should be carefully watched since it could cap. A break is therefore required to generate follow-through to 1.3247 at least. Further resistance is found at 1.3380-85.
No real weakness seen yesterday until price reached the 1.3135 resistance. However, we still cannot point confidently to a more bearish stance until the 1.2968-1.3006 area is breached. We suspect that it will not happen today. However, should this be incorrect and losses are seen below this support area then look for follow-through to 1.2846-70 at least which we feel should provide a pullback at the very least. Further support is at 1.2800.
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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