Thursday September 1, 2005 - 01:14:02 GMT
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FX-Strategy - www.fx-strategy.com
Forex: Daily Forecast for the British Pound vs U.S. Dollar 1st September 2005 Price:
Resistance: 1.8055 ... 1.8084 ... 1.8108 ... 1.8144
Support....: 1.8007 ... 1.7976 ... 1.7952 ... 1.7934
We look for a pullback to 1.7952-76 followed by a rally to the 1.8096-1.8108 area which should cap
Although we did not expect the sharp reversal higher, we are quite confident of the revised structure and will not yet become strongly bullish. Indeed, we feel the greater risk is for an initial decline that should reach the 1.7952-76 area. From this region we will look for a rally back higher towards the 1.8096 peak and possibly to the 1.8108-20 area. However, we look for this to cap. Further resistance is then found at 1.8144 and then the 1.8175 high.
The reversal higher has dashed the directly bearish view but we do not expect this move higher to be sustained. More likely first thing today we shall see a retracement back to the 1.7952-76 area but feel this will hold to generate a test of the 1.8096-1.8108 area. We consider this next test higher as a good selling opportunity with stops to be placed above 1.8144.
Elliott Wave Comments:
1st September 2005
The reversal higher is most frustrating but here we can see a more obvious structure. The reversal from 1.7817 was from a 38.2% projection of the recovery from 1.7889 to 1.8096 and therefore suggests an expanded flat corerction within Wave -ii-. The peak at 1.8055 appears to be Wave iii of Wave -c- higher and we therefore expect a pullback to the 50% retracement at 1.7952 (though we should allow for a 58.6% retacement at 1.7934). From this pullback we look for Wave v to reach the 1.8096 Wave -a- peak and probably a little higher to the 76.4% Wave -ii- retracement at 1.8108. This should complete Wave -ii- and allow Wave -iii- to develop.
(c) FX-Strategy Inc 2005
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