Thursday June 7, 2007 - 04:00:36 GMT
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Daily Analysis for GBPUSDPrice:
Resistance: 1.9955 ... 1.9995 ... 2.0040 ... 2.0073
Support: 1.9900 ... 1.9878 ... 1.9864 ... 1.9821
Mixed â€“ though preference is still for losses but need 1.9955 to remain capping
So far price hasnâ€™t quite made it to the 1.9900 support. The correction has been very shallow and frankly I feel we should see more. However, we do need to accept that the larger picture is now bullish and thus we need be aware of the risk of a direct resumption of the rally. There is resistance at 1.9955 and if this breaks we should see a move through 1.9967 but then we need be cautious at 1.9991-97 as this could cause a second decline. Only direct breach extends to 2.0093 and 2.0131.
While we have still not seen a break above 1.9960-70, considering the general moves elsewhere we should now be seeing a return to the 2.0131 high around where we should see a pullback. (June 6th)
The correction has been exceptionally shallow and thus I feel there is a risk of consolidation turning into additional losses. We require the 1.9955 level to cap at most with a break of 1.9900 triggering stronger losses to 1.9864 at least. Take care there â€“ only below sees losses to the favored 1.9787-1.9821 area which should hold.
Given the rising cycles and the breaks seen in other currencies the downside looks unlikely and only below 1.9780 would extend to 1.9732-44. If this breaks then we could see 1.9657-75 again. (June 6th)
ELLIOTT WAVE COMMENTS
The move higher yesterday does highlight the risk of a test of the wave equality target in Wave c at 1.9955-60. This remains below the last Wave b at 1.9997 and thus we cannot rule out a further ABC pattern lower.
Thus the 1.9960-00 area forms a band which controls the next larger move.
For today I can see a small Wave v that should reach the 1.9955-60 area but if this is correct a pullback lower should develop at least and we then need to observe to see whether this forms just a correction or whether it spurns a new ABC pattern lower.
Cautiously I label the 1.9967 high as Wave (i) of Wave (C) and thus watch for the 50%-61.8% retracement at 1.9787-1.9821 in Wave (ii) before pushing higher through the 2.0131 high.
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