Friday July 9, 2004 - 01:15:28 GMT
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Forex: Daily Forecast for the British Pound vs U.S. Dollar 9th July 2004Price 1.8525
Support....: 1.8540 ... 1.8580 ... 1.8603 ... 1.8635
Resistance: 1.8505 ... 1.8465 ... 1.8420 ... 1.8405
Cautiously bullish to 1.8665 before lower
Price was softer than expected yesterday but we retain a short term bullish stance with support at 1.8465-80 being critical. A break above 1.8540-50 will assist higher and once through the 1.8580 area we look for a move through to 1.8665 where we look for a stronger pullback at the very least. Be aware that the 1.8600-05 area could produce a temporary pullback before the rally to 1.8665.
The 1.8480 level has held and we feel we must wait for a bearish stance. Watch the 1.8665 area as we consider this a likely stopping point for a larger pullback - maybe even reversal. From the 1.8665 level any break back below 1.8580 and then 1.8530 would trigger further losses. Alernatively any direct loss of 1.8480 would provoke aggressive losses down to 1.8350-75 initially but we suspect lower to 1.8270.
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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