Tuesday June 1, 2004 - 00:52:54 GMT
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FX-Strategy - www.fx-strategy.com
Forecast for USDJPY June 1st 2004Price: 110.85
Resistance: 109.70 ... 110.00 ... 110.40 ... 111.00
Support....: 109.20 ... 109.02 ... 108.70 ... 108.30
Mixed - looking for a broader recovery but waiting for breaks
We give a high risk weighting to the probability that the 109.02 low completed the entire correction from 114.85. However, we have already seen a steady recovery and need to assess when to establish long positions. There is resistance between 109.70-85 and above here would suggest follow-through higher towards 110.40. However, this initial recovery could well be choppy. Support is at 109.20 and we feel this can hold. If we see break then we look to establish long positions at 108.70 with stops below 108.30.
Although the decline from 114.85 has moved below our ideal 109.90 retracement target we have seen good reason to suggest that the 108.70-109.00 area should see completion of the decline. Since we have seen the upper end of this range hit yesterday we are very cautious about any downside today. There is resistance at 109.70-85 and should this hold and a move is seen back below 109.20 then we look for one final dip to the 108.70 area. Only below here would trigger a move to 108.30 but this lower level needs to break to cause any continued move lower.
Elliott Wave Comment:
Although we are disappointed that our ideal target for this retracement at 109.90 was breached we have seen good relationships in the new count shown below which identifies the 108.70-00 area as a good stalling point for Wave [iv]. This represents a 61.8% retracement of the Wave [iii] rally and while deep does not break the pattern. Given that 109.02 did indeed provide the low for Wave [iv] this would imply a quick move back to 113.30 (watch the prior broken uptrend line now at 112.10 and rising) under Elliott guidelines as the intervening Wave B. Following a correction from there look for Wave [v] to rally to 116.10 minimum and probably 117.75
(c) FX-Strategy Inc 2004
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