Friday December 15, 2006 - 05:49:41 GMT
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Daily Analysis for USDCAD
Resistance: 1.1578 ... 1.1595 ... 1.1620 ... 1.1640
Support: 1.1550 ... 1.1535 ... 1.1496 ... 1.1475
Mixed - waiting for breaks
The 1.1572 level has been broken but by only 6 points and the situation has become a little ambiguous. There is a bearish divergence and this should be noted although we require a break of 1.1535 to trigger this. Until then any move above 1.1578 would allow the upside to extend to 1.1595 and we feel to 1.1640 which is a larger target and should cap for a reversal lower.
Having achieved our minimum target we are on warning that a reversal can be seen. Only above 1.1572-95 extends to 1.1640 before lower again. (December 14th)
While the 1.1572 resistance has broken it hasnâ€™t been by much. However, before following the bearish divergence we really need to see yesterdayâ€™s low at 1.1535 broken. If seen it increases the downside risk for 1.1496 initially which could cause a pullback so take care. Breach here extends the downside to 1.1444.
Having achieved the 1.1572 minimum target we are on warning of a reversal that can occur at any time and once confirmed we should see a move back to 1.1380 before a correction. (December 14th)
ELLIOTT WAVE COMMENTS
Price reached the 1.1572 target being a 61.8% target in Wave (v) and where Wave (c) is equal to Wave (a). It could well be the peak but we do note an unusual structure in yesterdayâ€™s rally and thus we need confirmation of losses below 1.1425-50 to signal the decline. Until then we should be aware of a chance of a final rally to 1.1640 before reversing.
Price is still flirting with the 1.1572-78 resistance. We also note a daily target at 1.1640 which is also implied as a 138.2% projection of Wave (a). Thus we keep our minds open for a move to 1.1640 before lower.
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