Thursday October 20, 2005 - 01:19:44 GMT
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Forex: Daily Forecast for the Euro vs U.S. Dollar 20th October 2005 Price:
Resistance: 1.1999 ... 1.2017 ... 1.2039 ... 1.2067
Support....: 1.1951 ... 1.1931 ... 1.1899 ... 1.1874
To keep the upward momentum we require 1.1931-51 to support and for a break above 1.2002 then 1.2062-67
Losses were restricted to 1.1874 and the reversal higher does appear to suggest that further strength can be seen. However, given the slight inconsistancy in the wave structure we still need to be a little cautious. We see support between 1.1931-51 and while this holds we can expect further gains today and these should reach 1.2062-67 at a minimum. A break above here is required to maintain the bullish stance.
The decline fell short of expectations and the wave structure is a little vague. We should keep in mind an alternative but more bearish picture. Having mentioned this we still feel there should be a minimum move to 1.2062-67. Thus a stronger bearish stance will require a break below 1.1931 which would then bring the 1.1874-99 area back under pressure. Breach would extend losses to 1.1827 and possibly 1.1754-83.
Elliott Wave Comments:
19th October 2005
The decline looks on track to reach 1.1827 and possibly 1.1783 in Wave c of Wave -b- to complete the expanded flat correction. The only small risk we see to this occurring is in timing rather than whether it will happen. With yesterday's low at 1.1914 we need consider the risk that Wave b of Wave -b- is actually developing in a flat and thus any move back above 1.1988 would confirm this scenario. This would imply a move back to 1.2121-34 to complete Wave b and then we'd look for Wave c lower in the same structure and target between 1.1783-1.1827. However, once achieved the implication will be for a recovery back to 1.2203-44.
20th October 2005
The reversal from 1.1874 was not expected but has been deep enough to suggest further strength should be seen. The only threat to the expanded flat correction pattern we have been following is that the 1.2203 high did, in fact, complete Wave [B] and thus we have seen a move down to 1.1874 in Wave [i] of Wave [C]. However, even this would imply a retracement back to 1.2062-67 and this is the key resistance to confirm whether continued strength to 1.2203-44 will be seen.
(c) FX-Strategy Inc 2005
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