Wednesday July 7, 2004 - 23:59:01 GMT
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Forex: Daily Forecast for the British Pound vs US Dollar 8th July 2004Price 1.8540
Support....: 1.8580 ... 1.8610 ... 1.8635 ... 1.8665
Resistance: 1.8530 ... 1.8495 ... 1.8480 ... 1.8455
Initially to 1.8610 but while price holds above 1.8495-1.8530 bullish to 1.8665
The uptrend has conitnued strongly and this implies further gains today. However, we look for the 1.8610 area to hold initially but while price remains above 1.8495-1.8530 we expect to see the rally reach 1.8665 before a larger pullback. Further resistance is at 1.8705 and 1.8755.
The continued gains seen yesterday do not support a bearish view today. We do see reistance at 1.8600-10 and this should trigger a pullback at the very least but we suspect this will remain above 1.8530 (max 1.8495) and thus any dip should be used to take profit. Any later test of 1.8665 should yield a similar corrective decline. Only directly below 1.8480 would prompt losses to 1.8360-90.
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.
The break above 1.8408 suggests that the decline from 1.8484 to 1.8011 was a a Wave (B) and we should now expect to see a further rally. Potential targets for Wave (C) are at 1.8650-70 (61.8% projection of wave (A)) at 1.8800 being a 76.4% projection of Wave (A) and then 1.9045 being wave equality of Wave (A).
(c) FX-Strategy Inc 2004
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