Tuesday August 2, 2005 - 00:28:28 GMT
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FX-Strategy - www.fx-strategy.com
Forex: Daily Forecast for the U.S. Dollar vs Japanese Yen 2nd August 2005 Price:
Resistance: 112.40 ... 112.76 ... 113.17 ... 113.45
Support....: 111.95 ... 111.68 ... 111.36 ... 110.99
While 111.68-96 holds there is risk of direct gains to 112.76 and possibly 113.45
A mostly corrective day but which remained above the 111.66 support and cautiously we take this as positive. However, the structure is slightly ambiguous now and further strength would only be confirmed on a move above 112.40 and then 112.76. Once seen expect follow-through to 113.17 and 113.45 from where we expect a pullback.
The 111.66-88 area continues to hold but even if it breaks we feel that there is limited downside. Next support is at 111.36 and only below here suggests a deeper correction to 110.99 but we feel this is the maximum downside for now. Thus only below 110.99 would allow losses to extend down to 110.70 and probably back towards the 109.85 area.
Elliott Wave Comments:
1st August 2005
The movement since the Wave iii high at 112.62 has been quite subdued but has yet to break below the crucial 111.66-88 Fibonacci retracement levels. We prefer to label Friday's low at 111.93 as Wave iv and as such we should then anticipate a move in Wave v to 113.71-114.04 (being 61.8% - 76.4% projections). We would then view this as Wave a of expanded Wave -b-. If the 111.66-88 area breaks then we need assess the nature of the underyling rally - quite possible this occurring in a triple three in Wave -b-.
2nd August 2005
With the length of the correction from 112.86 we are beginning to feel that this was actually the end of the first move higher and formed Wave (a). The decline from there has reached 111.68 in three waves and may thus have completed the correction in Wave (b) and if so, then we'd have Wave (c) equalling Wave (a) at 114.68 where an expanded flat Wave -b- will have projected by 23.6%. The only risk we see to this is a slightly deeper Wave (b) which could extend to 111.36 (50%) or even as low as 110.99 (61.8%) before Wave (c) develops. We prefer a direct rally.
(c) FX-Strategy Inc 2005
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