Thursday March 24, 2005 - 01:33:50 GMT
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FX-Strategy - www.fx-strategy.com
Forex: Daily Forecast for the British Pound vs U.S. Dollar Price:
Resistance: 1.8703 ... 1.8727 ... 1.8760 ... 1.8800
Support....: 1.8659 ... 1.8630 ... 1.8591 ... 1.8550
While we see risk of a dip to the 1.8590-1.8630 area we feel the main risk will be higher today
The decline has been much stronger than expected and while this does appear to have a more bearish medium term implication, for today we see limited downside and a greater risk of a recovery. We do still see chance of a dip to the 1.8590-1.8630 area but will expect this to hold. Thus any long positions established in this area should have stops placed below 1.8590. A move back above 1.8710 would allow the correction to move towards the 1.8750-65 area at least. Only above here would mean we see higher with 1.8800-33 the next resistance area.
Losses have been much stronger than expected reaching the 1.8659 area. While 1.8700-10 holds there is still chance of a minor dip to 1.8630 with 1.8590 also implied. However, any stronger bearish stance will need to see a break of 1.8590 and only then will we expect losses to extend down to 1.8505-36 where we expect a floor to develop.
Elliott Wave Comments:
23rd March 2005
Wave (iv) appeared to have found a peak at 1.9013 and should imply Wave (v) moving to 1.8778 at least and possibly down to 1.8690-1.8723. This should then cause a larger pullback. We should also note the alternate wave count that would label the 1.8943 low as Wave (a) and thus we shall see a larger Wave (c) lower now.
24th March 2005
The extent of the losses has forced us to re-label the wave count and this now sees the 1.8943 low as Wave (a) of Wave (iii) with the rally to 1.9013 forming Wave (b) and thus we are seeing Wave (c) of Wave (iii) develop and which has a target of 1.8591. Thus this should support and cause a reasonable pullback.
(c) FX-Strategy Inc 2005
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