Thursday February 3, 2005 - 01:32:48 GMT
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Forex: Daily Forecast for the U.S. Dollar vs Japanese Yen 3rd February 2005 Price:
Resistance: 104.08 ... 104.36 ... 104.63 ... 104.80
Support....: 103.56 ... 103.21 ... 103.00 ... 102.75
Cautiously looking for consolidation between 103.50 - 104.36
We are cautiously reversing our medium term bearish view. However, before a break higher we need to see a move above 104.32-36. Today we feel that there may be a risk of this level being tested - above 103.97-104.08 will confirm. However, until 104.36 is overcome there is still risk of a dip back to 103.50 once again. Thus only on a break above 104.36 can we look for a stronger move higher with next resistance found at 104.63-80 and then 105.42.
We have found the downside quite frustrating. However, we do see one potential selling opportunity today (with a tight stop and reverse). Any test of 104.32-36 could be sold with a tight stop. Conservatively, any rejection from 104.36 that falls back below 103.95-00 could be sold for a move back to 103.50 at least. Any earlier break below 103.50 would see the correction lower reaching 103.00-21. However, that is the lowest we now expect.
Elliott Wave Comments:
3rd February 2005
We are growing wary of the bearish stance - the extended consolidation from 101.82 and 101.67 proving just to long to make us feel comfortable. We need therefore be aware of the risk of a sharp move higher.
now sees the rally from 101.67 to 103.90 as Wave [i] with the move back to 102.34 forming Wave [ii] in an expanded flat. The rally to 104.08 appears to have occurred in five waves and we thus tentatively label this as Wave [a]. We now need to see Wave[b] and this may have ended at yesterday's low at 103.34. However, we also note the possibility of a further expanded flat here which would imply a rally to 104.32-36 before falling back to 103.34 once again. Any move above 104.36 would imply that Wave [c] is underway and should reach the 105.42 and we suspect the 105.94 area to complete Wave [iii] (being 161.8% of Wave [i]).
would continue the potential descending triangle but we would prefer to see the 104.08 level remain intact. This would imply a dip below 103.34 to take price back down to the 101.67-82 area in Wave D before a recovery in Wave E and then lower. However, given the bullish cyclic position this seems unlikely.
(c) FX-Strategy Inc 2005
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