Monday January 29, 2007 - 05:12:22 GMT
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FX-Strategy - www.fx-strategy.com
Daily Analysis for EURUSDPrice:
Resistance: 1.2930 ... 1.2955 ... 1.2975 ... 1.3001
Support: 1.2896 ... 1.2865 ... 1.2840 ... 1.2823
Cautiously we look for 1.2860-70 to support and for a reversal higher
We have seen losses edge lower, finding a low at 1.2876 and this may have satisfied the downside. However we do still need to allow for a second test lower to 1.2860-70 but still see this as a low amid a bullish divergence. Back above 1.2930 will assist and allow gains back to the 1.3000 area which may stall the move higher temporarily. Stronger resistance is found between 1.3043-81 which is expected to cap.
We still canâ€™t get exceptionally bullish but there does still seem to be risk of upward corrections while the 1.2854-65 (max 1.2800-30) area supports. The same resistance area of 1.3081-1.3131 is valid. (January 26th)
Losses seen in line with the preference but we feel there is a much lower risk of much in the way of losses today. Thus a stronger bearish stance can only be considered should the 1.2855-60 area break. If seen then look for additional losses to 1.2830 and probably the 1.2797-00 area which at this point we feel stands a good chance of holding. Next support is at 1.2756-77.
Even though the 1.2930 support broke we do not want to get too bearish. There is risk to 1.2854-65 which we feel will hold initially. Below watch 1.2800-30 - only below there provides a further 30-50 points. (January 26th)
ELLIOTT WAVE COMMENTS
We have reviewed this and our favored scenario is either a dip to the old low at 1.2865 in a flat correction or as far as 1.2800-30 in an expanded flat. If these are seen then expect a recovery from there to reach the 1.3081 target which should cap.
However, there is one more scenario that should be considered. What we have noted is that the initial rally from 1.2865 to 1.2986 and then the rally from what appears to be an irregular triangle to end at 1.2922 to the 1.3043 peak were equal in length.
Only below 1.2797 suggests we are seeing Wave v move lower with a 61.8% projection at 1.2777 and 66.67% at 1.2756 which should hold being around the old 1.2761 corrective low.
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