Friday March 18, 2005 - 00:59:02 GMT
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FX-Strategy - www.fx-strategy.com
Forex: Daily Forecast for the Euro vs U.S. Dollar 18th March 2005 Price:
Resistance: 1.3380 ... 1.3405 ... 1.3438 ... 1.3488
Support....: 1.3355 ... 1.3320 ... 1.3295 ... 1.3257
Slightly mixed with a bearish preference but waiting for breaks
The 1.3340 support held yesterday and we feel this was more likely to have been the start of a decline. However, until the 1.3340-55 support is broken we need to acknowledge that there is a risk of a retracement to 1.3400-10 and break here is required to confirm further gains. Thus if seen we would then look for a quick return to 1.3438 and then 1.3488 at least though the more likely target would then be at 1.3545.
Price moved down intially to 1.3368 and later followed through to 1.3340 which has held thus far. We feel teh move lower has been constructive and are cautiously optimistic that the downside is the more vulnerable. However, until the 1.3340-57 area breaks it would be wiser to hold back with a minor risk of seeing 1.3400-10 before a move lower can occur. Once a break below 1.3340 occurs look for a swift decline down to1.3295 at least and possibly the 1.3234-57 area. Eventually we would expect to see losses to 1.3174.
Elliott Wave Comments:
17th March 2005
Well, we had looked for a pullback but the depth of this has surprised. However, looking at the shorter term structure we feel this has developed in 3 waves although we are mixed between this having found a high at 1.3438 or whether there is one final high to come around 1.3455 which would represent a 61.8% projection of Wave c, itself having the same target area being 138.2% of Wave a. Assuming this holds, any break below 1.3397 would be an early sign of reversal lower and could keep the eventual target of 1.3174 on course.
We find a bullish structure difficult to see but we need acknowledge that a break of 1.3455 would imply follow-through to 1.3538-44 which would be a 261.8% projection of Wave -c-. We should watch that carefully if seen.
(c) FX-Strategy Inc 2005
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