Thursday May 3, 2007 - 04:48:01 GMT
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FX-Strategy - www.fx-strategy.com
Daily Analysis for USDCADPrice:
Resistance: 1.1098 ... 1.1122 ... 1.1141 ... 1.1165
Support: 1.1061 ... 1.1030 ... 1.1004 ... 1.0960
We still see risk for losses to 1.1030-37 (max 1.1004) before a larger pullback
While the 1.1130-34 resistance was broken by a few points we feel it was not sufficient to confirm a reversal higher. Indeed, the losses from there have been deep and there is risk of additional losses. Thus to revert to a bullish stance we will require a break back above 1.1100-22 and if see it would cause a retest of yesterdayâ€™s 1.1141 high and probably more towards 1.1191.
The test of 1.1047 may well have satisfied the downside target at 1.1037. However, only a break back above 1.1135 would imply a longer correction higher that could eventually reach 1.1436. (May 2nd)
Although the 1.1135 resistance was breached this was only by 6 points and the decline has been firm. While resistance at 1.1093-00 caps we still see potential for a test of the original 1.1037 target with minor risk of seeing this extend towards1.1004. However, we are expecting a reversal higher at any time.
We still note the 1.1037-47 area as support but also the 1.1004 level as a target from the shorter term projections. Only below 1.1000 would threaten a retest of the 1.0927 low. (May 3rd)
ELLIOTT WAVE COMMENTS
In the shorter term structure in the decline from 1.1226 we feel there may be a risk that we have seen only a 3-wave decline and thus while the 58.6% retracement at the 1.1130-34 pivot resistance caps we could see losses to the 261.8% projection in Wave [iii] at 1.1037. We also note potential Wave v targets around 1.0993-1.1019.
Any earlier break above 1.1135 would suggest that 1.1047 provided the Wave [iii] low and thus we would then anticipate a longer correction in Wave [iv] towards the 50% retracement at 1.1436.
We also note a small 61.8% projection in a minor Wave v at 1.1004. However, the Wave [iii] low should soon be in place.
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