Thursday May 27, 2004 - 01:53:38 GMT
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FX-Strategy - www.fx-strategy.com
Daily forecast for USDJPY May 27th 2004Price: 111.95
Resistance: 112.25 ... 112.55 ... 112.85 ... 113.30
Support....: 111.60 ... 111.30 ... 111.05 ... 110.70
After an early correction bullish to 113.30
Price failed to reach the ideal 110.70-111.10 support zone and reversed from 111.24. This occurrence, the attainment of a 38.2% Fibonacci retracement to the rally to 114.85 and the recovery from a long term supporting trend line from the 103.42 low puts us on notice of a larger reversal. There is resistance at 112.25 and 112.55. Any break above here should spur price higher to the 113.30 corrective high. However, we would look for this to hold on first test. Further resistance is at 113.85.
Failure to break below 111.24 concerns. There is still some risk of further losses, but these are looking less attractive now. To regenerate any bearishness we need 112.55 to hold. Providing this occurs and we see a move back below 111.60 and 111.24 we should then see continuation of the move lower to 110.70 at least and possibly 109.90.
Elliott Wave Comment:
We are concerned with the wave count we have been following. The Fibonacci relationships have not been consistent and yesterday would imply Wave -iii- stalling at 111.24, much higher than would normally be expected. While this may be due to the rising trend line from 103.42, the proximity of the 38.2% Fibonacci retracement target at 111.10 and the Pivot support at 111.00 is a clear warning of a possible alternative wave count. The first image projects the wave count we have been following.
The second image provides an alternative wave count from the 114.85 high in the form of a Triple Three. Interestingly this holds better Fibonacci relationships and thus with the proximity of the 38.2% retracement target at 111.10 and the rising trend line we must give this alternative strong consideration. The first move would be to the Wave -b- seen at 113.30 which would destroy the original wave count - thus watch this closely.
(c) FX-Strategy Inc 2004
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