Tuesday May 29, 2007 - 05:01:37 GMT
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Daily Analysis for USDCHFPrice:
Resistance: 1.2306 ... 1.2331 ... 1.2354 ... 1.2382
Support: 1.2264 ... 1.2238 ... 1.2228 ... 1.2204
Care â€“ there does appear to be risk of a move to 1.2331-54 again before lower
Little downside seen on Friday and a solid recovery that has stalled at the 1.2306 resistance thus far. This does appear to point to a return to the 1.2331 level at least and just possibly 1.2354. Support at 1.2260-65 needs to hold while additional gains are possible. However, at this point I feel the 1.2331-54 area should cap. Thus only above extends to 1.2382 (take care) and only through that resistance would force a stronger move to 1.2436-39.
The current consolidation is providing some breathing space before the next leg higher than should start from the 1.2204-28 area. Minimum target is at 1.2354-82 and maximum 1.2436-39. (May 25th)
Friday saw a large degree of messy sideways price action and the failure to move to the 1.2239 low does suggest we have a risk of seeing 1.2331 and possibly 1.2354. However, while this region caps there is every chance we shall see a return to the 1.2228-39 area. Next support is at 1.2204. Only below this lower support would trigger stronger losses to 1.2125-55.
The direct nature of the rally makes it a little difficult to be 100% certain on the eventual stalling area but I can see two areas to watch for â€“ 1.2362-82 and 1.2436-39 and feel one of these will prove the top. (May 22nd)
ELLIOTT WAVE COMMENTS
The lack of direction is frustrating but I can see two potential scenarios: First is that we see a triangle continue a sideways correction that means we see a peak at 1.2306 but then consolidation above 1.2260-65.
The second scenario would call for a break above 1.2306 and this would force either a flat correction with a peak around the original 1.2331 peak â€“ and at most the 1.2354 corrective peak which represents a 23.6% expanded flat.
This second scenario would therefore still leave the risk open to a decline towards the 50% retracement in Wave â€“b- at 1.2228 and at most the 58.6% retracement at 1.2204.
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