Thursday January 27, 2005 - 01:54:01 GMT
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FX: Daily Forecast for the U.S. Dollar vs Swiss Franc 27th January 2005 Price:
Resistance: 1.1850 ... 1.1880 ... 1.1923 ... 1.1940
Support....: 1.1790 ... 1.1762 ... 1.1747 ... 1.1708
Mixed - waiting for breaks
The reversal lower was sharp and would appear to place emphasis on the downside but given the recent wild swings we would prefer to wait for confirmation of losses. Thus until 1.1785-90 is broken there still remains a small chance of a reversal higher again. A break back above 1.1850 and then 1.1875-85 will confirm and if seen then we would expect follow-through back to the 1.1971 peak and higher. Next major resistance is at 1.2083-92.
The sharp reversal back lower was a surprise and has reached 1.1801 thus far. However, until the 1.1785-88 level is broken and preferably followed by 1.1747 we cannot be certain of further losses. If seen then the next stalling point is at 1.1708 and then 1.1650. We would expect an overall bearish mvoe to stall around the 1.1625 corrective low.
Elliott Wave Comments:
26th January 2005
The break to a new high appears to confirm the bullish structure though this is by no means a clean wave count higher. However, following the bullish count we would expect to see a move to 1.2012 in Wave iii of Wave C followed by a short Wave iv and a Wave v which would then complete Wave c at around 1.2083-92. This would represent Wave c as 138.2% of Wave a and Wave -iii- being 138.2% of Wave -i-. This would then be followed by a correction in Wave -iv- and final rally in Wave -v- to 1.2130-40 where Wave (c) is equal to Wave (a) and Wave (iii) is 261.8% of Wave (i).
The only risk to this we see is a move below 1.1747-88 which would then appear to favor losses back down to 1.1625 in an expanded flat correction. However, we give this low risk weighting.
27th January 2005
The sudden sharp reversal actually appears to support the expanded flat correction structure though a break of the 1.1788 and 1.1747 lows would assist. Once seen the risk will be for a move down to 1.1650 initially and then the 1.1600-25 area.
(c) FX-Strategy Inc 2005
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