Tuesday April 5, 2005 - 01:16:25 GMT
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Forex: Daily Forecast for the British Pound vs U.S. Dollar 5th March 2005 Price:
Resistance: 1.8775 ... 1.8803 ... 1.8840 ... 1.8872
Support....: 1.8744 ... 1.8707 ... 1.8681 ... 1.8660
We tend to look for a further dip to the 1.8680 area before a larger correction higher
We do see this current decline as limited but the problem is in identifying the low. We look at two areas - the first being at 1.8680 and the second back at the 1.8590 low. We tend to prefer the higher area supporting and for a recovery to be seen above 1.8803 which would then allow gains back to 1.8840 which could provide a temporary peak. However, any break above 1.8840 would drive price back higher to 1.8910 which, if seen, could hold on the day.
We have been correct in our expectation of limited losses and this remains our basic view. We feel that 1.8775-1.8803 should cap for the first half of today and for losses to continue but we need to be careful in the decline. Our favored view is that the 1.8680 area should be tested and should hold. Thus caution should be exercised at this level. At the most extreme we feel that 1.8590 may well be tested again but we do not envisage break at this point.
Elliott Wave Comments:
4th April 2005
The depth of pullback from 1.8590 appears to cause the directly bearish stance to be less likely. We feel that there is more need for further price development to make the pattern clearer and for now we have placed a Wave [x] label on the 1.8975 peak although we are not 100% happy with that. It is still possible that we see a larger sideways correction and if this is seen then it is possible that we can count the 1.8590 low as Wave [i] and the coming correction (and possibly Friday's 1.8975 high) as Wave [ii]. However, for now we feel it prudent to watch for further price development.
5th April 2005
We have narrowed our scenario to two:
The first calls for a low in the 1.8650-80 area followed by a recovery to above 1.8974 and probably to 1.9096 in a larger triangle structure from the 1.8505 low. This would obviously imply some further sideways consolidation before price could break lower.
The second scenario calls for a retest of 1.8590 in a flat correction from the first test and would therefore imply a return to the 1.8975 area again.
(c) FX-Strategy Inc 2005
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