Friday February 11, 2005 - 01:50:58 GMT
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Forex: Daily Forecast for the British Pound vs U.S. Dollar 11th February 2005 Price:
Resistance: 1.8700 ... 1.8730 ... 1.8766 ... 1.8793
Support....: 1.8645 ... 1.8596 ... 1.8570 ... 1.8550
While there is a small risk of a test at 1.8766 we feel the main direction will be lower today
Price rallied strongly to reach the 1.8730 level - just above our preferred resistance at 1.8715. Indeed, while 1.8640-50 supports we do see a minor risk of further gains reaching the 1.8766 level but we would expect this to hold. Thus only above 1.8766 would imply a much larger upward correction and signal further gains towards 1.8827 and 1.8870 at least on the day. Further resistance - which should hold if seen - is between 1.8920-30.
The pullback higher breached our 1.8715 resistance slightly, reaching 1.8730. We feel this may have formed a cap but until 1.8640-50 is broken we cannot rule out a move as high as 1.8766. Thus only below 1.8640 would cause losses to resume with the next support at 1.8596 and then the 1.8520-50 area. We feel these levels should hold on the day. Further support is then found at 1.8469.
Elliott Wave Comments:
8th February 2005
The drop to 1.8546 appears to have completed a wave -iii- from 1.8927 and thus we expect further downside. However, first look for a Wave -iv- to develop that has Fibonacci levels at 1.8689 (38.2%) and 1.8733 (50%) and from this range we expect further losses.
10th February 2005
The marginal new low confused slightly and we have adjusted the retracement levels to 1.8667 and 1.8715 and look for an end to Wave -iv- around this area to cause a decline in Wave -v- that should get us to 1.8409 at least and we suspect to 1.8330-48.
11th February 2005
While slightly above the 1.8715 area we feel the retracement has probably reached its full extent with only a mild risk of seeing 1.8766 first. This looks to have completed Wave -iv- and thus we look for a Wave -v- to develop lower which should have a minimum target at 1.8454 (61.8% projection) and then at 1.8393 (being a 76.4% projection).
(c) FX-Strategy Inc 2005
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