Tuesday June 15, 2004 - 01:16:40 GMT
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FX-Strategy - www.fx-strategy.com
Forecast for the British Pound vs US Dollar 15th June 2004Price: 1.8160
Resistance: 1.8180 ... 1.8210 ... 1.8226 ... 1.8240
Support....: 1.8125 ... 1.8095 ... 1.8070 ... 1.8042
The decline stalled just below the 1.8075 support and we feel that this indicates a short term pullback. We need to see support at 1.8095-1.8110 hold (even possibly allowing for a test of 1.8075) and for follow-through above the 1.8180 corrective high. Once seen this should allow price to continue through to 1.8210-26 minimum where a little care should be exercised. This could provoke a return to 1.8100-10 nce again. Any direct move above 1.8226 would target 1.8240 and possibly 1.8270-90.
We feel that the recovery from 1.8042 gives little downside today. As we go through a correction the risk of a complex correction are high we think. Any direct test of 1.8210-26 which gets rejected could entail a return back down to the 1.8100-10 area once again. However, under this scenario it should hold and generate a stronger move higher. Any direct loss of 1.8125 without breaking above 1.8180 would risk immediate losses back down to 1.8070-75. However, only below here and 1.8040 would trigger further direct losses down to 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 2004
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