Monday February 5, 2007 - 05:42:08 GMT
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FX-Strategy - www.fx-strategy.com
Daily Analysis for USDJPY
Resistance: 120.94 ... 121.20 ... 121.35 ... 121.66
Support: 120.7 ... 120.35 ... 120.09 ... 119.81
Mixed â€“ waiting for breaks
The pullback from 120.90-121.16 didnâ€™t move very deep and we have seen additional gains to 121.35. We now see support at 120.70 and then at 120.35 and overall we feel this will support. To generate a bullish stance we need a recovery from that area and for a move back above 120.94-121.20 and if seen it should allow follow-through above 121.35 and to 121.64-68 at least â€“ care here as this could cap. Only a break above here would extend to 121.99-122.18 which is likely to cause a pullback.
The recovery from 120.09 doesnâ€™t quite look like it should support a very strong move higher at present. We need a break above 121.64-68 then 122.18 to extend to 122.63-94 at least. (February 5th)
The break up to 121.35 looks encouraging but not within the structure we had been considering and thus we need to keep this in mind. Any break below 120.35 would begin to threaten the 120.09 low again and any breach would signal losses to 119.64-88 and at most 119.41.
The 120.09 low has made the very minimum requirement for the bearish pattern and while we do still need to be cautious about one new low around 119.41-81 â€“ only below there would extend MT losses. (February 2nd)
ELLIOTT WAVE COMMENTS
The 120.09 low has just breached the Wave efa low at 120.19 so could have completed the entire Wave efc and therefore Wave â€“iv-. Only while an internal 50% retracement at 120.90-00 caps could we see a decline to the ideal target at the 38.2% retracement at 119.81 and possibly the 41.4% retracement at 119.64 where a potential Wave v will have projected by 61.8%. Above 121.16 would suggest wave â€“a- of Wave â€“v- is beginning and should retest the 122.18 high.
We feel the rally to 121.35 came in 5 waves and represents a Wave â€“a- but it is too low to be within a Wave â€“v- position. Thus we will watch but there does seem risk of a more complex correction.
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