Saturday March 26, 2005 - 22:39:16 GMT
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Forex: Daily Forecast for the U.S. Dollar vs Japanese Yen 28th March 2005 Price:
Resistance: 106.50 ... 106.73 ... 107.08 ... 107.43
Support....: 106.06 ... 105.90 ... 105.69 ... 105.48
Cautiously we look for the drift lower to extend to the 105.69-90 area
The Dollar hit the 106.57 target perfectly and has seen a mild drift lower from there. Indeed we feel that today should see this drift continue with risk down to 105.69-90. We feel this area is a good buying opportunity but do not expect a direct resumption of the uptrend. Stops should be placed below 105.40. Any recovery from the stated support is likely to find initial resistance back around the 106.50-57 area. Further resistance is at 106.73-84.
The 106.57 target was met perfectly and encourages our overall bullish view. However, for today we feel the downside drift lower is likely to continue and do not anticipate any move above 106.50 at this point and indeed the first move should be lower we feel. Watch support at 105.90 and 105.69 which we feel will limit the decline. Maximum downside should be at 105.48-54. Thus a stronger move lower can only be expected on a break of 105.40-50 with the next support at 104.50-82.
Elliott Wave Comments:
24th March 2005
The structure has developed well and is now within the 106.00-36 resistance area. However, given the nature of the rally and the break of the 105.50-60 pivot resistance we are beginning to consider a more bullish wave count. This would actually label the 105.17 high as Wave [i] and thus the 104.82 low was Wave [ii] woth Wave [a] of Wave [iii] now under construction and expected to stall in the 106.36-57 area.
If we take the original count (shown in black) we are now approaching the Wave [iii] target of 106.36
Either way we expect a pull back from the 106.36-57 area and this should set up a test of the 105.50-60 pivot support - at the most a retest of the trend line on close where we last saw a touch at the 104.82 low. As this pullback develops we need to assess which of the above scenarios is correct.
28th March 2005
The test and rejection at 106.57 tends more to support the more bullish count which labels this high as Wave [a] of Wave [iii]. Thus we need look for Wave [b] to develop. We see a 61.8% retracement at 105.48 which is in the same area as a 38.2% correction in the original count where 106.57 would be Wave [iii]. It is also an important pivot support and thus we look for this to support and for gains to move higher to 107.89. However, given the weekly & daily cyclic picture do watch out for the risk of an expanded flat Wave [b] that would probably imply a 105.48-84 range this week.
(c) FX-Strategy Inc 2005
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