Sunday February 6, 2005 - 12:17:59 GMT
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FX-Strategy - www.fx-strategy.com
Forex: Daily Forecast for the U.S. Dollar vs Swiss Franc 7th February 2005 Price:
Resistance: 1.2140 ... 1.2170 ... 1.2203 ... 1.2226
Support....: 1.2076 ... 1.2050 ... 1.2016 ... 1.1970
We feel that 1.2140 should contain the upside today
We note the key weekly resistance at 1.2140 along with the bearish divergence in the hourly chart. Thus while we feel there should be a test of the 1.2130-50 area we feel this should hold. Thus only directly above 1.2150 would trigger strong follow-through with next resistance found at 1.2196-1.2203 and then 1.2226. Further resistance is found at 1.2265.
While 1.2050-76 supports we feel the initial risk is higher today towards 1.2140-50. This is a key resistance and while this holds it would appear to favor a correction from here and any loss below 1.2050-70 would imply deeper losses down to 1.2016 at least. Further support is then found at Friday's 1.1940 low.
Elliott Wave Comments:
3rd February 2005
The entire structure since the original 1.1886 high has been exceptionally complex and difficult to place in either bullish or bearish structures... Thus we need to watch the coming days carefully with weekly cycles pointing higher and daily soon to find a low. We will monitor a possible expanded flat correction from 1.1971 which would see resistance either at 1.2017 or at 1.2045 - the latter level interesting since it also represents a wave -iii- of 123.6%. If this pattern is correct we would then expect a return to the 1.1747-78 area in Wave -c- at the time of the daily cycle low.
7th February 2005
We find it difficult to generate a more bullish wave count than one which take price to 1.2140 where the weekly pivot level rests (being the low seen in January 2004). This takes the 1.2050 high on Thursday as Wave -iii- of Wave (c) and thus the correction down to 1.1940 as Wave -iv-. From here we have a small conflict in terms that Wave (c) will equal Wave (a) at 1.2140 and Wave (iii) has a target of 1.2130 as a 261.8% projection of Wave (i). However, if we look at the implied Wave -v- projection in Wave (c), the normal 61.8% or 76.4% projections come in at 1.2203 and 1.2265 respectively. However, we note that a 41.4% projection (harmonic mean) lies at 1.2140 and within wave -v- we see Wave -c- equaling Wave -a- at 1.2146.
Thus we do expect a reaction at 1.2140. A Wave (iv) that retraces 38.2% would take price back to 1.1846 while a full 50% rertacement would lie at 1.1755.
However, we note the bullish cycles and would respect any break above 1.2150.
(c) FX-Strategy Inc 2005
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