Wednesday May 9, 2007 - 05:24:35 GMT
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FX-Strategy - www.fx-strategy.com
Daily Analysis for USDJPYPrice:
Resistance: 120.18 ... 120.45 ... 120.88 ... 121.20
Support: 119.65 ... 119.48 ... 119.09 ... 118.73
Caution â€“ but while 119.48 supports a move to 120.52-88 is possible to end the rally
The 119.48 support held perfectly and we have seen a firm recovery to 120.03 thus far. From a wave structure perspective we still prefer one last rally that should see a retest of 120.40-45 followed by a correction before a final move to the 120.52-120.88 area. However, we feel this will cap. Further resistance is at 121.20 and only above here triggers stronger gains to 121.94-122.18. Watch a resistance line around 120.13-20 (see EW chart.)
The upside progress has been slow and we feel we are close to a major peak. While 119.48 supports there is still room to 120.88-121.20 but should cap. Only breach triggers a retest of the 122.18 high. (May 9th)
Losses bounced just about perfectly from the 119.48 support. We prefer a bullish stance but note the breach and retest of a prior support line and watch this retest at 120.13-20. If this holds then any break below 119.48 would cause stronger losses towards 119.09 at least and potentially 118.35-50.
We are still expecting a major high very soon with the next major barrier at 120.52-73. While this holds a break back below 118.90-00 would appear to suggest confirmation. Then look for a return to 115.16. (May 3rd)
ELLIOTT WAVE COMMENTS
Yesterdayâ€™s low at 119.51 is now labeled as Wave iv and we can generate targets for Wave v between 120.88 (61.8%) and 121.20 (76.4%.) Also note the 76.4% retracement at 120.52 where Wave â€“c- will have extended by 161.8%.
Given the break of the prior trend support we should be aware of an earlier reversal. A break below 119.48 would highlight the risk of daily Wave B having completed at 120.45 and thus we should look out for the start of a larger Wave C lower. First stop should be close to the last Wave â€“b- at 118.23 with a 161.8%-176.4% projection of alternative Wave â€“a- at 118.35-50.
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