Tuesday November 1, 2005 - 01:01:34 GMT
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FX-Strategy - www.fx-strategy.com
Forex: Daily Forecast for the U.S. Dollar vs Japanese Yen 1st November 2005 Price:
Resistance: 116.65 ... 117.10 ... 117.49 ... 117.94
Support....: 116.07 ... 115.74 ... 115.52 ... 115.08
We cautiously feel the 116.65 level should hold for a pullback to the 115.52 area
Breach of the resistance area between 115.72 and 116.09 did indeed cause the Dollar to extend gains to 116.50 and just a little higher today ending at 116.65. This is an important level and may cause a deeper pullback. Thus only above 116.65 would extend gains to 117.10 at least which should be observed. Above here is required to extend gains to 117.49 and possibly 117.94.
With the move higher to just above the 116.50 resistance we feel a pullback is possible and current levels provide a good risk reward trade with tight stops above 116.65. A move back below 116.30 will assist and allow the pullback to extend towards 116.07 and probably lower towards 115.52-74 which we feel stands a good chance of supporting. Next support is at 115.03-08.
Elliott Wave Comments:
1st November 2005
Price has risen to the 116.50 target and a few points above and this could therefore be labeled as Wave -b- of an expanded flat. However, with the general break higher in the Dollar against the European currencies we need be aware of the risk of a more bullish structure. The two scenarios are:
(1) An expanded flat with this morning's peak at 116.65 being Wave -b- of Wave [iv]. This would imply a (probably quick) decline to the 114.84-115.08 area and then followed by a move down to the 114.27-59 area - the higher level being the first retracement lower in Wave -a- and 114.27 being a 14.6% retracement in daily Wave [iv].
(2) With the move to 116.65 from 114.84 being close to wave equality of the initial move from 114.59 to 116.23 the peak seen this morning could be Wave -i- of Wave [a] of daily Wave [v]. This should imply a pullback of around 50% at least which generates a target of 115.62. This could then provide Wave -ii- and then convert into a stronger move higher in Wave -iii-.
(c) FX-Strategy Inc 2005
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