Thursday June 24, 2004 - 01:38:14 GMT
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Daily Forecast for the Euro vs US Dollar 24th June 2004Price 1.2070
Support:.... 1.2105 ... 1.2125 ... 1.2150 ... 1.2190
Resistance: 1.2060 ... 1.2040 ... 1.2025 ... 1.2005
Mixed - waiting for breaks
Perfect rally to 1.2170-90 seen yesterday with an equally perfect return to 1.2064. We have described the two scenarios in the General Market Conditions and these should be read to understand the implications and break levels. A bullish scenario requires 1.2040-60 to hold. Break of this does suggest follow-through to 1.2005-25 where an opportunity to take advantage of a corrective
rally. For a more bullish stance we need to see 1.2040-60 hold and then a break above 1.2125-50 should clear the way for stronger gains to 1.2320-50.
Losses from 1.2190 have been perfect but given the two scenarios in the General Market Conditions we need to be flexible. A break below 1.2040 would imply follow-through to 1.2005-25 and probably then a much stronger bearish medium term view. However, we suspect that a initial pullback is likely from the 1.2005-25 area which could reach back to 1.2120-25. This level should be used to establish short positions.
Elliott Wave Comments:
We have had to adjust our wave count here and provide two alternatives. The first is that the decline from 1.2350 to 1.1950-55 formed Wave (A) from where we are witnessing a rather choppy Wave (B) that would imply a move to 1.2190-00 in Wave c from Friday's low at 1.1973. This would imply wave equality of Wave a. However, that would imply the end of the correction higher and a direct resumption of the downtrend.
The other alternative which given the daily cycles have turned higher seems more likely is that the decline to 1.1950-55 in fact formed Wave [x] and we are now seeing Wave C of the next ABC structure. This would have targets above 1.2350 at least with likely stalling areas at 1.2456 and 1.2540.
Update June 24th
The peak at 1.2190 puts us on alert for a possible early break lower. A break of 1.1970-00 will confirm the downside. However, until then we could still count the move to 1.2190 as an expanded flat correction to the initial decline from 1.2147 to 1.2064. Thus hold back a bit and be aware of the implications of breaks levels described in today's analysis.
(c) Fx-Strategy Inc 2004
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