Sunday March 6, 2005 - 07:07:23 GMT
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FX-Strategy - www.fx-strategy.com
Forex: Daily Forecast for the U.S. Dollar vs Japanese Yen March 7th 2005 Price:
Resistance: 104.85 ... 105.20 ... 105.55 ... 105.84
Support....: 104.31 ... 104.05 ... 103.82 ... 103.48
Slightly cautious but feel that we should see further gradual recovery
We were slightly surprised to see price reach back to the 105.56-58 area again but from there, as expected we saw a drop down to the 104.25-46. The nature of the decline was quite strong so we have to be a little careful but we tend to prefer a scenario that calls for gradual, and probably choppy, gains. First resistance is as close as 104.85 and this could cause a pullback. However, while this remains above 104.31-40 we feel the risk will then turn higher towards the 105.00-20 area on the day from where a correction is possible. Further resistance is back at the 105.50-60 area but we would not expect breach on any test today.
With stops above 105.65 price dipped well to the 104.25-46 target. We are cautious from here and feel that the 104.31 area may well have contained the downside. Thus only a move below 104.31 would allow losses to extend towards 104.00-10 which also stands a chance of holding. Therefore, any stronger bearish view will require a breach of 104.00 and then 103.82 to provoke further losses to 103.48 at least and possibly 103.10.
Elliott Wave Comments:
7th March 2005
The sharp drop from 105.56-58 does cause the wave structure to appear rather complex and therefore suggestive of a complex correction. With daily cycles now due to find a low we tend to stick with a bullish interpretation which would then imply either a flat correction from the first 105.56 high or a triangle type structure. This should imply a low has either been seen at 104.31 or we could see a dip to the 104.09 area. Once this correction completes look for gains to move above 105.60 and accelerate higher.
As a caveat - any drop below 104.00 would then imply Friday's 105.58 high was a second Wave x but we would still feel the losses implied will be minimal.
(c) FX-Strategy Inc 2005
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