Wednesday February 16, 2005 - 01:42:56 GMT
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Forex: Daily Forecast for the Euro vs U.S. Dollar 16th February 2005 Price:
Resistance: 1.3030 ... 1.3055 ... 1.3093 ... 1.3122
Support....: 1.2994 ... 1.2962 ... 1.2940 ... 1.2905
While we cannot rule out a move up to 1.3090-93 we tend to feel the upside should soon stall
We were slightly surprised with the shallow pullback and new higs seen yesterday which stalled within our 1.3040-55 target. We cannot rule out this being the high for the recovery. However, until 1.2940 breaks there is one last chance of a spike up to 1.3090-93 but we would look for this to hold. If we are wrong then the next stalling point is at 1.3155.
More-or-less direct gains were seen to the next resistance area at 1.3040-55 and with a mild bearish divergence we are on warning that a reversal can happen at any time. Breach of 1.2940 would appear to confirm this and if seen we would then look for losses to extend down to 1.2890-1.2905 at least and probably lower to 1.2844-53 which could hold on the day. Further support is found at the 1.2806-20 pivot support.
Elliott Wave Comments:
15th February 2005
With the break of 1.2933 the continued immediate downside risk is reduced. What we have seen are two 3-wave moves higher from 1.2730 and this could imply a double zig-zag although the 1.2988 level is not implied by any other measurement. This does then suggest a possible third abc pattern higher to the larger Fibonacci retracements at 1.3055 being a 38.2% retracement of Wave (iii) while the 1.3090 level represents a 50% pullback of the entire move lower from 1.3666. These should then be observed.
The only other alternative is that 1.2988 holds and causes a larger complex pattern. Break of 1.2820-56 would turn us to this pattern with either a triangle or expanded flat (to the weekly support line) most likely.
16th February 2005
The 1.3055 level has been achieved and we are sensing that this can hold. Although the wave strcuture in the rally from 1.2730 is very unclear we feel that there is an argument for this occurring in a triple three and thus the downside once again becomes a threat.
We are still a little mixed between the two wave structures shown but considering the pictures being painted elsewhere we are edging towards this recovery being a Wave [b] to the decline from 1.3666 down to 1.2730. However this would mean that the duration of the correction has been too brief and we should then consider this as Wave (a) of a more complex correction with a dip to 1.2625-50 possibly forming the Wave (b) of an expanded flat. It is too early to say for sure and thus we shall continue to observe the forthcoming wave development.
(c) FX-Strategy Inc 2005
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