Friday September 16, 2005 - 00:55:16 GMT
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FX-Strategy - www.fx-strategy.com
Forex: Daily Forecast for the British Pound vs U.S. Dollar 16th September 2005 Price:
Resistance: 1.8079 ... 1.8115 ... 1.8140 ... 1.8180
Support....: 1.8036 ... 1.8014 ... 1.7973 ... 1.7958
While there are signs of a base being formed, we feel losses can extend to 1.7958-73 before a stronger correction ensues
Losses really turned quite aggressive yesterday to reach to the lower 1.8039 support. While it is possible this could form a low, we feel that there is a stronger argument to suggest that losses should continue while the 1.8115-40 area caps. We would therefore prefer to look for buying opportunities at the next major support area around 1.7958-73 from where we anticipate a stronger recovery. Given the bullish divergence that has formed, any earlier break of 1.8140 would signal continued gains to 1.8180-00 at least. Next resistance is at 1.8236.
While losses were preferred yesterday these declined more aggressively than expected and stalled a few points below the 1.8039 support. However, we still feel that although there are early signs of the downside having become over-extended, while 1.8115-40 caps the main risk still remains lower to 1.7973 at least and possibly 1.7958. However, we feel this will be the extent of the downside. Next support is at 1.7917 and 1.7880.
Elliott Wave Comments:
15th September 2005
Yesterday's price action provided us with a little more evidence but we remain a little mixed considering the views in the other currencies. In may ways it looked as if yesterday's recovery imply Wave -a- stalled at 1.8180 with the peak at 1.8298 being Wave -b-. This would then imply direct losses in Wave -c- to complete Wave -iii-. We see a 161.8% projection in Wave -iii- at 1.8146 and a 261.8% projection at 1.7973.
However, the 1.8146 target appears to close but may provide support for a more complex Wave -b- and therefore a return to 1.8298-1.8303 once again. Any move below 1.8146 does see pivot support at 1.8090-00 but then we need consider the Wave -iii- target at 1.7973 with a 138.2% projection in Wave -c- being at 1.7958. This lower target appears valid therefore - we just have to see whether this occurs directly or there can be a deeper pullback in Wave -b- that must stall below 1.8303-24.
16th September 2005
There is no change in the analysis described yesterday and we still feel we should see extension of the losses to that area today to complete Wave -c- between 1.7958 and 1.7973 to complete Wave -iii-. From there look for Wave -iv- to begin.
(c) FX-Strategy Inc 2005
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