Friday November 2, 2007 - 04:07:33 GMT
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Daily Analysis for USDJPY
||Mixed - waiting for breaks but MT remains bullish|
||The reversal from 115.91 was not expected and looks a bit strange. I am not convinced we are going to see a direct recovery and may just see some minor new dips. Only a move above 115.20 would suggest a slightly stronger pattern but even then we will need to be careful around the 115.54-60 area. It is above here that we could begin to talk about a retest and break of the 115.90 high. Next resistance is seen at 116.32 (minor) and then 117.00-10.|
||Cycles are bullish and should push price higher with just the short term risking some consolidation. First larger target is at 117.93 and further out at 122.03â€¦ (2nd November)|
||Losses started from 115.91 which is rather unusual and have bitten much deeper than expected. We will probably either see a slightly extended sideways consolidation or a dip to minor new lows around 113.87-114.26 before higher again. Watch initial resistance at 114.93-115.20 which, while caps can still force some downside. In a sideways consolidation the 115.54-60 area should cap but then the downside should be limited to 114.26-45. Only below 113.87 would pressure 113.24-49. |
||Daily cycles are now rising along with the weekly and this should now mean we should see very little, probably no downside opportunity for a while. It will take a breach of 113.87 to concern. (1st November) |
ELLIOTT WAVE COMMENTS
Messy and ratcheting was an appropriate description yesterday. I have changed the wave count to show the 115.90 high as Wave â€“i- but we should also consider this as a particularly deep Wave b of Wave â€“iii-.
If this is a deep Wave â€“ii- then Iâ€™d actually prefer to see a move down as far as the 76.4% retracement around 113.87 before we see Wave â€“iii- move higher else the target will be too high.
Any earlier break above 115.20 (last Wave b) would highlight the chance this was actually a deep Wave b and thus we should either see a triangle develop or a direct resumption of the rally in Wave c. Triangle resistance would come in around 115.54-60. So above there signals direct gains.
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