Thursday January 4, 2007 - 05:19:11 GMT
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FX-Strategy - www.fx-strategy.com
Daily Analysis for USDCAD
Resistance: 1.1737 ... 1.1755 ... 1.1782 ... 1.1805
Support: 1.1705 ... 1.1674 ... 1.1646 ... 1.1628
Cautiously we look for a move down to 1.1628-46 before a final leg higher
Gains were seen as preferred that have already reached the favored 1.1730-60 target. In fact we still see upward potential but there appears to be a strong risk of the pullback lower edging downwards a bit more before the final move higher. Thus to see a direct move higher we need the 1.1700-10 area to continue supporting and for breach of 1.1737 that should cause a test of the 1.1750-60 area. Care here. Only clean break would extend the upside to 1.1805 and eventually 1.1847.
We have attained the 1.1730-60 target and still feel there should be one further test here before a larger pullback. Thus only above 1.1760 would extend to 1.1847 and possibly 1.1918. (January 4th)
The 1.1730-60 area has held and we feel a slightly larger pullback is probably and while 1.1737 caps we should see losses below the 1.1700-10 pivot area that should allow the downside to slip further to 1.1674 and eventually to the 1.1628-46 area which we feel will hold. Thus a stronger bearish stance will require a break below 1.1628 which would then imply a test of the 1.1580-85 pivot support which would be expected to hold on first test.
The 1.1730-60 area is still expected to cap but it will be worth watching the reaction at the send test if seen. Only an earlier break below 1.1620 would see a test of 1.1580-85 and later lower. (January 4th)
ELLIOTT WAVE COMMENTS
No real change in view but we note good pivot support at 1.1580-85 that should hold while there is any chance of a further retest of the prior support line.
The prior support line was tested once again yesterday but we feel this is only Wave iii of Wave (c) and thus we look for a 41.4%-50% pullback in Wave iv to the 1.1628-46 area from where a final move up to the 1.1750-60 area which is just a touch above the Wave equality target for Wave (c).
Any earlier move below 1.1620 would imply a swift move down to the area of the Wave (b) at 1.1428.
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