Thursday September 23, 2004 - 01:28:34 GMT
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FX-Strategy - www.fx-strategy.com
Forex: Daily Forecast for the U.S. Dollar vs Japanese Yen 23rd September 2004 Price: 110.65
Resistance: 110.75 ... 111.15 ... 111.40 ... 112.25
Support....: 110.40 ... 110.15 ... 109.85 ... 109.55
Bullish to 111.15-35 before capping and reversing lower again
The break of 110.15 was encouraging to both short and long term structures. We feel the next leg higher has started but a break of yesterday's high at 110.75 is required to generate further gains that should reach 111.15 minimum and we feel then to 111.35-40. However, we look for this to cap and provoke a correction lower. While the bullish view is valid look for 110.40 to support.
With yesterday's break higher we feel that any bearish stance must be put on hold. At the most today we would expect a test of 110.40 but this may not happen at all if 110.75 breaks on the topside. However, we do feel that a test of 111.15-35 should provide an excellent selling opportunity with tight stops above 111.55 providing a good reward/risk ratio. Only directly below 110.40 would cause a test of the now 110.10-20 pivot support. Further support found at 109.50-60.
Elliott Wave Comments:
September 16th 2004
With the lack of follow-through lower we find the bearish wave count difficult to justify. Indeed we have therefore relabeled the chart below to consider the 108.75 low as the base of Wave (c) of a triangle from the 106.99 low. This should imply Wave (d) of the triangle being around 111.00-10 which would leave Wave (e) remaining above 109.20-30 and probably finding a base between 109.60-110.20. A break above 112.46 would suggest the uptrend to year end has already begun.
September 20th 2004
There is no change in our view from the end of last week. The extreme lack of direction makes the interpreatation of the wave count slightly difficult to assess but it is clear that the past week has seen soome form of complex correction. Our favored view is that this forms part of a triangle in a Wave (x) position that should complete by the end of today or into tomorrow to allow a rally into the larger triangle high to complete Wave (d). This should develop in three waves. From the line drawn the implied high is around 110.10 but do allow for a false break to around 111.10-50 before pullback in Wave (e). Ideally the Wave (e) should remain above 110.00-30 but we should allow for a dip as far as 109.50-70. Subsequent strength should be persistent - for targets please see the long term view in the monthly section.
(c) FX-Strategy Inc 2004
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