Friday January 26, 2007 - 05:21:16 GMT
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Daily Analysis for USDJPY
Resistance: 121.82 ... 122.12 ... 122.40 ... 122.60
Support: 121.26 ... 120.91 ... 120.70 ... 120.40
We look for a recovery from 120.91-00 to reach 122.12 before lower again
The low seen at 120.19 doesnâ€™t appear to fit into any Fibo relationships I had been expecting and thus with the strong recovery from that level it does seem as if we should see further gains. However, first thing we should see is a pullback that should stall in the 120.74-121.00 area. If we see this correction move to the low end of the range it will increase my feeling that the next rally will stall at the 122.12 target held for the early part of the week. Only breach would extend to 122.60-94.
The correction this week has been unusual but we still need a break above 122.12 to extend gains to 122.60-94 and 124.00-31. (January 26th)
The decline broke a few points below the 120.25-31 first target but the recovery has been much stronger than expected. Thus we need be cautious about the downside for the moment. First move today should be to the 120.74-00 area but then expect a recovery. We feel the 122.12 area should be tested but should cap and cause a stronger decline again. Below 120.65-74 would see losses resume for 120.19 and 119.70.
Price is still ratcheting higher and this still has a bullish medium/long term structure. While 122.12 caps we still see potential for a correction to 119.70 and possibly 119.20-30. (January 26th)
ELLIOTT WAVE COMMENTS
The reaction higher from 120.19 does not quite fit into an immediately bullish wave structure. Certainly with Wave â€“ii- being very shallow and swift does suggest that Wave â€“iv- should be deeper and longer.
What we do note is that within Wave â€“c-, if we count the 121.78 high as Wave iii then yesterdayâ€™s low came between a 41.4% and 50% correction. Tus if we then label this as Wave iv we can derive a Wave v target of 76.4% at 122.12 which is where Wave â€“iii- will have extended by 161.8%.
This we look for a pullback in Wave â€“iv- following this test.
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