Wednesday August 4, 2004 - 01:19:32 GMT
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FX-Strategy - www.fx-strategy.com
Forex: Daily Forecast for the U.S. Dollar vs Japanese Yen 4th August 2004Price 110.65
Resistance: 110.85 ... 111.15 ... 111.30 ... 111.66
Support....: 110.30 ... 110.05 ... 109.60 ... 109.45
Mixed - waiting for breaks
The drift lower continued yesterday and we need to be flexible from here. Any break above current levels around 110.65-75 would suggest the chance of a return to 111.15-30. This area should be watched closely for signs of a cap developing. Only above 111.30 would allow gains to continue towards 111.65-70. However, here too we see evidence of a possible cap. For any stronger bullish view we shall need to see a clean break of 111.70 which would then allow gains to move up to test the 112.46 high and possibly 113.00.
The drift lower has begun to look as if it could have greater bearish implications. However, we need to navigate around the short term wave structure which has become quite complicated. Any dip from current levels that moves below 111.50 would appear to allow further losses to the 110.00-30 area. However, we feel this will hold on first test. Any initial rally to 111.15-30 would appear to suggest a cap for further losses back down to 110.00-30 and then lower.
Elliott Wave Comments:
August 2nd 2004
This week could prove erratic and complex. It now appears that Wave (iii) ended at 112.46, lower than the ideal 113.00 target. Thus we are seeing the development of Wave (iv) that has Fibonacci retracement support at 110.80 - being 38.2% of Wave (iii) - and at 110.20-30 - being 50% of Wave (iii).
Given the mixed cyclic pressure with the yellow cycle beginning to rise again we feel that a flat correction or expanded flat is likely and in line with the guideline of alternation. We therefore suspect that we will see an expanded flat which has a target at 113.00-10 which would allow price to test the original target for Wave (iii) but would then cause a second decline back to the 110.75-80 area.
Clearly a break below 110.20 would threaten the entire scenario and would have to re-assess the entire wave structure of the rally.
August 2nd 2004
Having completed the long term analysis yesterday we are beginning to doubt the current wave count detailed below. We will leave this for a day or so to watch price development but there is a scenario that calls for the low at 106.99 to be Wave (a) of a larger triangle, the peak at 112.46 as Wave (b) and we are now seeing Wave (c) that would target the 107.60-108.20 area.
(c) FX-Strategy Inc 2004
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