Tuesday August 31, 2004 - 00:41:09 GMT
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Forex: Daily Forecast for the Euro vs U.S. Dollar 31st August 2004 Price: 1.2045
Bullish - holding above 1.2020 and moving to test 1.2135
Resistance: 1.2075 ... 1.2100 ... 1.2135 ... 1.2180
Support....: 1.2040 ... 1.2020 ... 1.1985 ... 1.1965
Price remained above 1.1960-70 and has moved to test 1.2068. This is encouraging but has not yet confirmed a stronger move higher which requires support at 1.2020 to continue to hold and then generate a second test of yesterday's 1.2068 high. We feel this would break on a second test and allow follow-through to 1.2130-35 at least. Break of this higher level would confirm further gains. Next resistance is at 1.2175-85.
With yesterday's dip lower that failed at 1.1986 we tend to feel that the downside is complete for this moment. Thus only a move back below 1.2020 and then 1.1967 would generate a stronger move lower to 1.1890 where a floor should be seen. Any break of this lower level would suggest direct follow-through to the 1.1760-70 lows.
Elliott Wave Comments:
30th August 2004
The drop from 1.2385 has now almost reached the 1.1967 low and in conjunction with the cyclic picture there appears to be few wave structures open to us. If indeed this decline is part of a correction from 1.1967 then the 1.1960-00 area should provide a base. If price rallies directly today from 1.2000 we may just still be able to argue a triangle pattern that would allow a lift to 1.2280-00. Indeed, this would be preferable since a drop to 1.1960-70 in a flat correction would imply a rally all the way back to 1.2385 which is difficult to consider right now - though not impossible within the 2 week bullish cyclic picture.
The alternative we need to consider is that the peak at 1.2385 actually formed the Wave B peak and this decline could then reach wave equality of Wave A at 1.1890 to form Wave [i] of a larger decline. From this low we would then expect a Wave [ii] correction over the next two weeks of bullish cycles before the larger decline should develop. Thus a little flexibility is required to establish exactly what we are looking at but this should become apparent early this week.
(c) FX-Strategy Inc 2004
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