Wednesday July 28, 2004 - 01:16:24 GMT
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FX-Strategy - www.fx-strategy.com
Forex: Daily Forecast for the U.S. Dollar vs Japanese Yen 28th July 2004Price 110.80
Resistance: 111.10 ... 111.35 ... 111.50 ... 111.70
Support....: 110.75 ... 110.35 ... 110.10 ... 109.70
Bullish to 111.30-50 before a stronger pullback
The triangle structure mapped out perfectly yesterday and has generated the expected rally. We are a little in two minds but tend to prefer a bullish scenario. This would require the current test of 110.75-80 to hold the correction lower and generate a further rally that should reach the ideal target are around 110.30-50. However, we will expect this higher area to hold and generate a stronger correction back down again. Further resistance is found at 111.96 and 112.25.
Price has reached 111.16 and is close to one possible target. However we look at possible selling opportunities either on a test of 111.30-50 or on a break below 110.75-80 (which is being tested as we write). Our bias is to wait until 111.30-50 to establish short positions that should break back below 111.10 and 110.75 to allow losses back to 110.30-40 initially. Further support is found at 109.60-80.
Elliott Wave Comments
The triangle pattern in a Wave iv position completed yesterday at 109.60 and this should now imply gains to the 111.30-50 area which matches the prior Wave (x) resistance at 111.45. We are tentatively labeling this as Wave (a) of Wave (iii) and this implies a pullback in Wave (b). On simple Fibonacci retracement levels we can see potential support at 109.60-80 being the 50% retracement of Wave (a) and also is where the prior Wave iv ended. Further support is at 109.25.
From this corrective low in Wave (b) we will then look for further gains with targets for Wave (iii) at 112.25 and a more likely target at 113.00.
(c) FX-Strategy Inc 2004
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