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The Daily Forecaster

Wed, Aug 27 2008, 02:39 GMT
by Ian Copsey

FX-Forecaster.com

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Bias:  While 0.8550-55 supports I see more potential for a recovery to 0.8635-66 initially and after a correction to 0.8688

Daily Bullish

The lower target at 0.8490 provided the expected low and I feel this should now cause a stronger recovery higher. The move above yesterday's first corrective peak at 0.8574 is encouraging and while 0.8550-55 conitnues to support I feel we shall see gains move up to 0.8635. This should cause a pullback. However, while it remains above 0.8579-90 look for the move to rise as far as 0.8688 from where a larger correction is likely.      

Medium Term Bullish
26th August:   We are now much closer to the anticipated 0.8526 target (and should allow for 0.8490) and while this holds there is a good chance of a deeper correction higher. A  move above 0.8688 would confirm. 

Daily Bearish

Losses were seen as expected to the minimum target at 0.8523 but also to the 0.8492 target which held perfectly. I feel today will continue to see gains and thus there will be limited potential for sales. The 0.8635 area is likely to provide a small pullback to the 0.8579-89 area but I wouldn't want to hold any further. Later a test towards 0.8688 should fail and provide a much better selling opportunity. Only an earlier drop below 0.8550-55 woudl concern and suggest a retest of 0.8492 and probable breach for 0.8443-53 min.

27th August: It looks very much as if we saw a major low yesterday and thus only break below 0.8492 would maintain the downward momentum for 0.8443-53 minimum but probably further to 0.8368.  

Elliott Wave Comments

26th August:

Losses have ruled and have reached 0.8560 this morning. Keep in mind the 0.8526 target which is a 76.4% projection in Wave (v). Also within the shorter term structure a wave equality target of the decline from 0.8811 to 0.8613 low is at 0.8490.

We do appear to be close to a larger reversal higher.

27th August:

The 0.8490 wave equality target was tested and held with bullish divergences in hourly, 4-hour and daily charts. This does suggest we have seen the end of a 5-wave move lower and thus we can expect a larger correction.

The prior Wave b of Wave iv should provide the first target at 0.8688 which should then cause a deeper correction. Beyond we need to take this step by step but there is every reason to consider the 41.4%-50% retracement of the entire decline at 0.9050-0.9175 as a potential target.

• The Brief Daily Forecaster

Published on  Wed, Aug 27 2008, 02:43 GMT