Thursday January 18, 2007 - 05:21:02 GMT
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Daily Analysis for USDJPY
Resistance: 120.75 ... 121.15 ... 121.40 ... 121.65
Support: 120.40 ... 120.21 ... 120.05 ... 119.72
Take a cautious approach but still prefer a decline down to 119.50-70 before higher
A mainly sideways day yesterday that didnâ€™t do too much to clarify the wave structure. However, if we want to make a preference then it is still bearish. This will require the 120.75 to remain capping. Thus a more bullish stance will only be implied on a break first above this 120.75 resistance which would allow follow-through to 121.07-20. Break here would test the 121.38 high and probably the 121.65-80 area.
Each successive resistance is giving way. We now have 120.88 and then 121.38-52 and then next resistance is at 122.60 and 124.00-30. (January 12th)
No break lower yesterday but while 120.75 caps we still see the main risk as lower. A break below 120.40 will assist and allow losses back to the 120.05-20 area and probable follow-through to the 119.50-70 target which is expected to hold and cause further strength. Only on a surprise breach would there be risk of additional losses to 119.26 and 118.76.
Price is still ratcheting higher and this still has a bullish medium/long term structure. This only back below 118.60 would begin to break down the structure. (January 16th)
ELLIOTT WAVE COMMENTS
The approach to 120.88-97 is one of two patterns. A peak at 120.88 would imply that Wave iii has extended a full 261.8% and thus we expect a correction in Wave iv â€“ or a peak at 120.97 implies an expanded flat in Wave iv which should imply 120.00-05 again â€“ max 119.72.
With the peak at 120.87 it would suggest that Wave iii ended there and as such we need to see a pullback in Wave iv with the 38.2%-50.0% retracements at 119.50-70 with a strong pivot support at 119.70. From here we would then look for a rally in Wave v to the 138.2% projection in Wave â€“c- at 121.65 which is where Wave v will have extended by 66.67%.
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