Thursday December 21, 2006 - 05:05:22 GMT
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Daily Analysis for GBPUSD
Resistance: 1.9670 ... 1.9695 ... 1.9722 ... 1.9747
Support ...: 1.9632 ... 1.9612 ... 1.9582 ... 1.9536
We look for the 1.9612-30 area to remain supportive and for a move back to 1.9715-45 initially
The 1.9748-51 held perfectly and caused anticipated losses to the 1.9615-45 support. While there is a minor risk of a dip to 1.9612 on the whole we still feel the 1.9617 low has completed the correction and a move above 1.9690-00 should allow a test of 1.9715-45 which should hold on first attempt. Breach would extend the upside directly towards the 1.9812 level at least and we prefer an eventual test of 1.9846-58 which should cap for a longer pullback.
Recovery has been seen to the 1.9726 corrective peak and we feel this should move to 1.9846 again followed by a correction and by early next year we target the 2.01 peak and possibly as high as 2.0230. (December 14th)
The losses to the 1.9615-45 area developed directly yesterday and this should be enough for the downside. Thus to create a move bearish structure we would need to see loss of 1.9612 and only if seen would we look for additional losses to extend to the 1.9576-89 area where a little caution should be exercised. However, overall we do feel it will mean the downward momentum will carry through to 1.9486 at least.
With the recovery from 1.9425-30 area we feel the larger move is still higher. Thus only below 1.9470-00 would begin to place a question mark over the bullish stance. (December 20th)
ELLIOTT WAVE COMMENTS
The rally to 1.9846 is still expected but may see a Wave iv back to the 1.9610-50 area first.
The corrective low has been seen already and we label this as minor Wave iv in Wave a of larger Wave v higher. The current recovery should move through to the 1.9846 high with minor risk of seeing the 76.4% projection in minor Wave v at 1.9858.
From this peak look for a pullback in Wave b of larger Wave v.
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