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The Daily Forecaster

Sun, Oct 5 2008, 10:57 GMT
by Ian Copsey

FX-Forecaster.com

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Bias:       While 1.7697 supports I still feel we can see the correction higher continue

Daily Bullish

The first resistance at 1.7728 did cause a deep  pullback but the failure to break below the 1.7549 low triggered a second rally that stalled at 1.7837. I suspect that we may see a small pullback to 1.7697 but overall while this supports I feel the upside still has legs for 1.7865-70 at least. Take care here as this could cause another correction. Only breach extends gains to 1.7940 and possibly 1.7968-95.      

Medium Term Bullish
3rd October:   I'm less bullish than before even if we haven't broken the 1.7444 low. To regain more confidence with a bullish stance we shall need a break back above 1.7870 and preferably 1.7940. Only then does the larger recovery seem possible. 

Daily Bearish

The picture is not 100% clear but overall the failure to break below 1.7549 may well cause another move higher. Thus for a bearish stance we need confirmation and the first key support is not far away at 1.7697. Breach would undermine a strongly bullish picture and allow slippage to 1.7643-75. If this area breaks then look for direct follow-through back to the 1.7549 low. Next major support is at 1.7421-44.

Medium Term Bearish
3rd October:   The general strength in the Dollar is making me very nervous about the downside here. While 1.7880 caps any reversal back below 1.7549 would likely retest the 1.7444 low quite robustly.

Elliott Wave Comments

3rd October: 

The decline to 1.7549 was a 76.4% projection in a Wave v from the 1.8181 Wave x high. It is possible that I have looked at this incorrectly and that instead of being Wave a it is actually a Wave c to complete the decline, but given evidence elsewhere this seems unlikely.

Thus we should concentrate on the 50% retracement in Wave b which rests at 1.7865-71. The 61.8% retracement lies at 1.7940. While these cap any pullback then we’ll see a retest of the 1.7444 low at a minimum in a possible flat correction. Otherwise we may be looking at an expanded flat.

To add to yesterday’s comments – any loss of the 50% retracement of the 1.3682 -2.1160 rally at 1.7421 would suggest a move as low as the 1.7046 major corrective low.

• The Brief Daily Forecast

Published on  Sun, Oct 5 2008, 11:01 GMT