Sunday July 25, 2004 - 14:02:21 GMT
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Forex: Daily Forecast for the Euro vs U.S. Dollar 26th July 2004Price 1.2100
Resistance: 1.2115 ... 1.2130 ... 1.2150 ... 1.2190
Support....: 1.2095 ... 1.2070 ... 1.2040 ... 1.2020
An dip to 1.2065-75 in early trading before a recovery
Price has declined to our ideal support area around 1.2040-80 and we feel that a larger pullback is due. However, early trading looks like remaining below 1.2110-20 and dipping to the 1.2065-75 area which we feel will form the base for a larger pullback higher. Thus, from 1.2065-75 or a direct break above 1.2130 we look for a recovery back to 1.2185-95 on the day. Further resistance is found at 1.2210-20.
Having reached our first downside target we are less bullish today. However, early trading should remain below 1.2120-30 from where we anticpate losses down to the 1.2065-75 level which we feel will hold. While we do not favor any losses below the 1.2040-60 area, any stronger bearish stance would need a breach of this area and if seen would suggest quite bearish implications. Next major support is at 1.1975 and this should hold on first test wo allow a correction back to 1.2040-80.
Elliott Wave Comments:
The decline to the ideal 1.2040-80 support appears to have developed in five waves and shorter term charts imply a low around 1.2065-75. We are labelling this Wave [a] to be followed by a rally in Wave [b]. There is resistance given by Wave iv at 1.2291 and also by the 61.8% Fibonacci retracement at 1.2310. This area is also a pivot resistance and thus we favor this 1.2290-1.2310 area as a potential ending point for Wave [b]. Any direct loss would imply an immediate test of the Wave (b) low at 1.1975.
(c) FX-Strategy Inc 2004
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