Wednesday May 18, 2005 - 00:42:25 GMT
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Forex: Daily Forecast for the U.S. Dollar vs Japanese Yen 18th May 2005 Price:
Resistance: 107.76 ... 108.04 ... 108.34 ... 108.57
Support....: 107.20 ... 107.00 ... 106.80 ... 106.40
Until 107.76 and indeed, 108.04-20 is breached we cautiously favor the pullback continuing
The call for 106.54 to support was good but we have seen the rally from there extend higher than expected. However, while we cannot rule out a direct resumption of the uptrend we tend to consider the correction is not quite complete. Thus to become more bullish we need a break of 107.76 and probably the 108.04-22 area also and only then would we look for follow-through to 108.57 at least. Breach of 108.57 & 108.88 would clear the way for a rally to 109.58.
The 106.54 level supported well yesterday but we are slightly concerned by the depth of the correction. However, while the 107.76 high remains intact we feel there is still a slightly greater preference for the downside. Break below 107.00 will assist and suggest losses to 106.40 at least and probably 105.97. Further support is then found at 105.54.
Elliott Wave Comments:
16th May 2005
We are now within the target area mentioned above and thus there is a risk of a pullback. If seen from the 107.77 level this could imply a retracement to the 105.80-00 area but we are reluctant to get much more bearish than this with weekly & daily cycles both pointing strongly higher. Any break through 107.77 would imply potential to 108.40 where Wave (c) is equal to 138.2% of Wave (a) and at an extreme to 109.58 which represents a 261.8% projection.
18th May 2005
We now count the expected 107.76 high as Wave (c) of Wave -i- higher and thus a correction in Wave -ii- is expected with a 50% pullback at 105.97 and 61.8% at 105.54. The only risk to this is a direct resumption of the uptrend which would then target 109.58.
(c) FX-Strategy Inc 2005
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