Monday January 8, 2007 - 05:41:15 GMT
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FX-Strategy - www.fx-strategy.com
Daily Analysis for EURUSD
Resistance: 1.3014 ... 1.3042 ... 1.3057 ... 1.3077
Support: 1.2980 ... 1.2967 ... 1.2935 ... 1.2905
We feel there should be an early recovery to 1.3042-57 before additional losses to 1.2935
Fridayâ€™s recovery was very shallow with a subsequent loss to the 1.2980 support. We feel this should provide a slightly larger correction which should move above 1.3014 and on to 1.3042-57 (max 1.3077) from where we anticipate additional losses. Thus a stronger bullish stance will require a break above 1.3077 and if seen would encourage gains to 1.3105-15 initially and later to 1.3150-74.
Yesterdayâ€™s losses warn of a slightly stronger decline. Thus to re-instate the bullish move we require a quick move above 1.3150-80 and if seen should quickly retest the 13296 and 1.3367 levels. (January 5th)
The 1.2980 support held well on Friday and there does appear to be a good chance of seeing an earlier recovery to 1.3042-57. While this caps (max 1.3077) we anticipate additional losses to the 1.2935 area which we suspect should hold. Only below 1.2905 would extend losses immediately to 1.2859.
The 1.2980 initial target has been seen and this should extend to 1.2935 from where a slightly larger correction higher should be seen ahead of further losses that could once again approach the 1.2761 low. (January 8th)
ELLIOTT WAVE COMMENTS
The decline from 1.3296 appears to be developing in five waves with Wave iii ending at 1.3075 and Fridayâ€™s low at 1.2980 being Wave a of Wave v. Thus while the 50%-61.8% retracement at 1.3042-57 caps in Wave b then we anticipate a decline in Wave c of Wave v to the 76.4% projection in Wave v at 1.2935.
This should cause a pullback to the entire move lower from 1.3367.
The other scenario to be aware of is the 138.2% projection of the 1.3367-1.3051 decline which rests at 1.2859.
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