Sunday June 27, 2004 - 22:40:01 GMT
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FX-Strategy - www.fx-strategy.com
Daily Forecast for the British Pound vs US Dollar 28th June 2004Price 1.8270
Support....: 1.8275 ... 1.8305 ... 1.8325 ... 1.8360
Resistance: 1.8230 ... 1.8175 ... 1.8145 ... 1.8100
We are bullish within an overall sideways pattern. This would imply gains moving as high as 1.8305-25 before a mild pullback. However, while this pullback remains above 1.8250-70 once again we feel the overall target will be in the 1.8355-60 area where we expect a move lower once again. Only above 1.8360 would cause a direct rally above 1.2408 and back to test the 1.8440-80 resistance area.
We feel we shall have to wait for a while to find selling opportunities. The 1.8305-25 area looks like providing a short term selling chance for a move back down to 1.8250-75. A better selling level may then develop at 1.8355-60 from where we consider a slightly longer, if erratic correction back to 1.8140-50 can occur.
Elliott Wave Comments:
The continued strength of the British Pound has been impressive and has implied that the daily cycles have found a low much earlier than expected. We have readjusted these in the daily chart above and also labeled the decline from 1.9140 into a three wave decline. Thus we are looking for strength for some while.
Both weekly and daily cycles are bullish but we should consider Elliott Guidelines that imply a test of the Wave (B) which rests at 1.8603. This will be approximate and applying the wave structure in the 8 hour chart below we can identify two potential targets for Wave (v) these being at 1.8565-85 representing a 61.8%-66.67% projection and then 1.8670 being a 76.4% projection.
We suspect this should occur this week and thus watch for a retracement from this region. We favor the 1.8565-85 area.
The entire structure has taken on a sideways pattern and while it is slightly early to be confirmed, there looks to be the possibility of a triangle pattern developing. At this stage it is uncertain whether this is eventually bullish or bearish but we do note that the recent cycle low has not really translated into gains. Thus we are still evaluating the pattern but consider the 1.8355-60 area to be a possible top within this triangle with 1.8130-50 being a possible low. Breaks of either end of this range would likely provoke a stronger follow through.
(c) FX-Strategy Inc 2004
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