Friday August 12, 2005 - 01:01:59 GMT
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FX-Strategy - www.fx-strategy.com
Forex: Daily Forecast for the U.S. Dollar vs Japanese Yen 12th August 2005 Price:
Resistance: 110.00 ... 110.14 ... 110.44 ... 110.73
Support....: 109.41 ... 109.16 ... 108.95 ... 108.34
Breach of 109.41 - 110.27 generates a further 50 point move
Losses declined slightly lower than the 109.66 target and leaves us a little mixed. In general we see resistance at 110.14-27 and support at 109.41. While 109.41 supports we feel a move back above 110.14-27 can be seen which should provoke follow-through to the 110.73-78 area. Direct break above the lower resistance may allow a few ticks higher. However, the 110.73-78 area should cap and only breach allows gains to extend to 111.35-50.
There are a few scenarios to consider but overall we need to be a little cautious about further downside. However, while 110.14-27 caps there is room for further losses although we have to watch the 109.41 level first. Only breach here would allow losses to extend to 109.16 at least and maximum 108.85-95 which we see as a good medium term, support level.
Elliott Wave Comments:
11th August 2005
Loss of 111.15 appears to have destroyed our expectation of either flat or expanded flat correction in this larger Wave (iv). The pattern now is a little unclear. We do note the chanc eof a triangle pattern from the 109.85 low which would imply a low around 110.28 (66.67% projection) to be followed by a move back to the 112.22-37 area. Alternatively (and not labeled) the correction from 109.85 could be occurring in a triangle. This would require a direct move higher.
The other possibility is a multiple ABC Wave (iv) and this could lead to losses to 109.66 in Wave (c) being 138.2% of Wave (a) and from where a Wave (x) should develop. (This would then imply the 112.86 high was the first Wave -x-.)
Thus with multiple alternatives we need to watch carefully over the next day or two to judge the correct pattern.
12th August 2005
We have to say that we are finding this pattern a little difficult right now being much too close to our 108.95 target quite this soon. There is a 161.8% projection in Wave (c) at 109.16 and it is possible that this will hold to generate a second Wave (x) ahead of further losses. However, right now we would rather sit & observe for another day or two to look at the reactions at the key support areas.
(c) FX-Strategy Inc 2005
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