Sunday August 22, 2004 - 23:19:19 GMT
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Forex: Forecast for the U.S. Dollar vs Swiss Franc 23rd August 2004Price 1.2510
Resistance: 1.2535 ... 1.2560 ... 1.2585 ... 1.2620
Support....: 1.2475 ... 1.2455 ... 1.2435 ... 1.2400
Initially bearish to 1.2435-55 but then risking consolidation before a break higher
The recovery from the 1.2400-10 support encouraged the view of further gains, although Friday's rally stalled at the lower 1.2535 resistance. While we are generally bullish we feel today could be quite frustrating with risk for range trading before the next break higher. However, we anticipate a good buying area in the 1.2435-55 area and while price could then see some range trading we do eventually anticipate a break above 1.2535 to 1.2560 at least. Next resistance is at 1.2615-25.
The initial move today looks to be lower to the 1.2435-55 area and resistance at 1.2535 should hold for this. Indeed, we feel a direct loss from Friday's close is more likely. However, the losses look limited to the stated support and we would only entertain a more bearish stance should support at 1.2400 break. On this eventuality the risk will turn towards further losses down to 1.2350-75 where a pullback is likely.
Elliott Wave Comments:
August 23rd 2004
Friday's recovery to 1.2535 appears to have completed an ABC pattern and should therefore spurn a pullback in Wave x. Logically this should remain above the 1.2400 Wave b low and probably above the Fibonacci retracement levels at 1.2335-55. Indeed, be aware of the chance of Wave x developing in a more complex pattern - possibly a triangle that could keep price within a tight range for a day or two. However, eventually we feel this correction/consolidation should trigger further gains in a second ABC pattern that would imply a test of 1.2560 initially in Wave (a) and after a pullback in Wave (b) a further rally to the 1.2625-45 resistance (representing a 50% retracement and the prior Wave -iv-) with some risk of a deeper pullback to the 61.8% retracement at 1.2670.
(c) FX-Strategy Inc 2004
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