Thursday July 22, 2004 - 01:35:45 GMT
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FX-Strategy - www.fx-strategy.com
Forex: Daily Forecast for the U.S. Dollar vs Japanese Yen 22nd July 2004Price 109.80
Resistance: 110.00 ... 110.30 ... 110.65 ... 110.90
Support....: 109.55 ... 109.35 ... 109.00 ... 108.80
We look for 109.55-65 to hold and for further gains to 110.65-90
Break of 109.80-00 is encouraging. Currently we are seeing a pullback from 110.30 amd look for 109.55-65 to potentially hold. Thus on a bounce from here or on a direct rally back above 110.00-30 we look for gains to extend towards 110.65 at least and we suspect to 110.90 where an intermediate cap can develop. Further resistance is found at 111.10 and then the 111.45-70 area.
The strong move higher yesterday appears to negate any underlying bearish stance. Only a move below 109.50 would allow losses to extend down to 108.80-00 but we would then see this as providing support. Further support is found at 108.10-40.
Elliott Wave Comments
While we have seen break of the 109.70 level this should have implied strong follow-through in Wave [c] of Wave [iii]. However, this has not (yet) occurred and until then we need to be aware of the fact that wave equality of Wave [i] from the Wave [ii] low at 107.53 lies at 110.10 and internally within that rally at 110.30. Thus this 110.10-30 area needs to break to retain the directly bullish interpretation. While 110.10-30 holds and a break is seen below 109.50-75 it would imply that the labeling of Wave[i] and Wave[ii] should be replaced by Wave a and Wave b with an anticipated peak at 110.10-30 being Wave c to complete Wave [i] higher. Retracement levels for the new Wave[ii] would then imply support emerging around 108.20-50.
The rally to 110.30 looks to have confirmed the break higher. We have two possible structures, not too different from each other, the first labelling the first peak at 109.57 as Wave [i] and the 107.53 low as Wave [ii] while the second count which, given the move to 108.08 we tend more to favor, labels the 110.02 high as Wave (i) and the 108.08 low as Wave (ii). Either way we will expect further gains quite soon that should at least test the 111.45-96 peaks and we feel a little further. Be aware that any aggressive rally could take price as high as 114.30 in Wave [iii].
(c) FX-Strategy Inc 2004
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