Wednesday June 16, 2004 - 02:07:41 GMT
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Daily Forecast for the Euro vs US Dollar 16th June 2004Price: 1.2150
Resistance: 1.2168 ... 1.2190 ... 1.2210 ... 1.2255
Support....: 1.2150 ... 1.2130 ... 1.2100 ... 1.2075
Bullish to 1.2190-1.2210 before correcting lower again
The recovery from 1.1950-55 has extended higher to 1.2168 thus far and we look for the 1.2130-50 area to support to allow a final move to the 1.2190-1.2210 resistance where we feel a cap will develop and cause a larger pullback. Thus only a break above 1.2210 would allow gains to extend towards 1.2255-70.
We feel that a test of 1.2190-1.2210 is likely but for most of the day we expect a choppy decline. There is initial support at 1.2130-50 and any direct break of this support would imply immediate losses. Care at thi slevel as we may seen some consolidation from here. Next support is at 1.2070-80 while a move to 1.2030 is probable.
Elliott Wave Comment:
We are exceptionally frustrated to have missed the recent rally and have adjusted the daily cycles as shown above. The cycles look bullish for a further 5-10 days and we are approaching the key resistance areas of 1.2355-1.2455 which we feel will be tested during this period.
From the daily chart it can be seen that we have adjusted the decline from 1.2927 to a diagonal triangle Wave (A) within whihc the Wave [v] was very close to being a perfect 76.4% projection of the decline from 1.2927 to 1.2055. This now implies we should be looking for a three wave correction higher and Elliott Guidelines suggest this should be to the span of Wave [iv] (at 1.2456) with a focus on the extreme of Wave [ii] of Wave [V], this being at 1.2387.
In the rally from 1.1758 we have now labeled the 1.2180 high as Wave [a] and the decline to 1.1771 as Wave [b]. We therefore look for a five wave rally to complete Wave [c]. We can look at several measurements for Wave [c]. Clearly there are the Elliott Guideline targets at 1.2385-1.2456 which we should observe closely. We should also consider the Double Bottom at 1.1758-1.1771 which would project a minimum target at 1.2600. Also consider a 76.4% correction of the entire decline from 1.2927 to 1.1758 which rests at 1.2650
Internally in Wave [c] we have seen Wave i rally to 1.2059 and Wave ii down to 1.1893. We can derive two targets for Wave iii. The first is around 1.2290 (which we have seen on Friday) being a projection of 138.2% and the second is at 1.2360 being a projection of 161.8%. Generally the former projection of 138.2% is more common. Therefore, following a correction in Wave iv we will expect the final rally to reach either between 1.2385-1.2456 or all the way to the 1.2600-50 area. We shall need to assess this as price develops over the coming week.
The correction from 1.2350 continues and has been deep. Internal wave structures suggest this should continue to 1.1865-90 at least but with a daily cycle low due any day we have to be cautious about execpecting any further. If we look at the larger picture we are not due to see a major cycle high until end of July, possibly into August and as such we have to take the rally to 1.2350 as a three-wave move. This could imply the correction to the 1.2927 - 1.1758 decline could prove to be complex and thus this could mean a triangle, flat or expanded flat correction. A recovery from 1.1865-90 would suggest a triangle while any move down to 1.1758 implies a flat correction. Alternatively an expanded flat would imply a dip down to 1.1620-1.1530 before higher.
(c) FX-Strategy Inc 2004
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