Sunday June 13, 2004 - 14:22:30 GMT
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FX-Strategy - www.fx-strategy.com
Forecast for the British Pound vs US Dollar 14th June 2004Price: 1.8195
Resistance: 1.8205 ... 1.8225 ... 1.8245 ... 1.8270
Support....: 1.8160 ... 1.8140 ... 1.8115 ... 1.8100
While 1.8205-45 holds we look for losses down to 1.8075-00
As suspected the 1.8442 level provided the peak to the pullback and we look for losses, thus give a bullish stance less weighting. Only a move first above 1.8205 would bring some relief to the immediate bearishness and provoke a pullback towards 1.8245 at least and possibly as high as 1.8470. Only a break at the latter level would trigger further gains to 1.8335.
The losses from 1.8442 came right on cue and we feel this should provide for further losses today. We feel there is a strong risk of 1.8205 holding and for losses to 1.8115 at least and probably 1.8075-00 where a pullback is likely. Further support is found at 1.8055 and then not until 1.7940-65.
Elliott Wave Comment:
The continued strength of the British Pound has been impressive and has implied that the daily cycles have found a low much earlier than expected. We have readjusted these in the daily chart above and also labeled the decline from 1.9140 into a three wave decline. Thus we are looking for strength for some while.
Both weekly and daily cycles are bullish but we should consider Elliott Guidelines that imply a test of the Wave (B) which rests at 1.8603. This will be approximate and applying the wave structure in the 8 hour chart below we can identify two potential targets for Wave (v) these being at 1.8565-85 representing a 61.8%-66.67% projection and then 1.8670 being a 76.4% projection.
We suspect this should occur this week and thus watch for a retracement from this region. We favor the 1.8565-85 area.
The trend line drawn is a little weak but we do feel that the break of 1.8280 is reversing the uptrend and thus confirms the peak at 1.8484 as a Wave (A) that should provoke a pullback. There is support at 1.8075 and at 1.8100 (the prior Wave [iv]) and this should hold for now at least. There is also a Fibonacci 50% retracement target at 1.7945-70 that should be kept in mind.
(c) FX-Strategy Inc
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