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The Daily Forecaster

Fri, Nov 21 2008, 03:30 GMT
by Ian Copsey

FX-Forecaster.com

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Bias:                  Support is at 93.10-37 and I suspect this area will hold for a reversal higher

Daily Bullish

Losses were stronger than expected but while I feel there is still potential to reach this area I feel it will hold to cause a reversal higher. Only an earlier break above the 94.69 area will imply an earlier break higher and then we should see gains push to 95.00-20 and probably closer to the 95.60 area. Around here a pullback is possible ahead of a second attempt at the 96.23 corrective high - possibly a little higher. Take care this could cause a reversal lower. Only above 96.30 would see a move into the 96.50-00 congestion area.

Medium Term Bullish
21st November:  Watch the 93.10-15 area which, as long as it holds, forces a break back above 96.50 raises the chance of a stronger push higher and probably to the 98.26 corrective high and above.

Daily Bearish

The stronger losses broke through all supports to reach into the 93.15-80 congestion area and normally this type of area causes a pullback. While 94.69 caps there is still chance we shall see another dip lower with support around 93.10-37. I feel this will hold. However, also note the 92.80 support. Only below there will maintain losses for 92.27 which also holds the risk of a reversal higher. Next support is at 91.60 but nothing then until the 90.88 low and 90.00.

Medium Term Bearish
21st November:   The break of 94.20-46 has extended losses but only below 92.80-93.15 will imply extension to 90.88 and probably 90.00. I feel this lower support stands a good chance of causing a reversal if seen.

Elliott Wave Comments

21st November:

Well the losses were deep yesterday and below 94.46 which opens the way for a dip in a final Wave c. The way things progressed yesterday it seems as if the initial 1.6430 low was Wave a and the 96.23 high was Wave b. This provides a wave equality target at 93.15 while within Wave c I think that while 94.69 caps (a 50% retracement in minor Wave iv of Wave c) then we can see extension to the 93.10-15 area.

This also represents a 76.4% retracement of the 90.88 - 100.54 rally. If my count is right and we have seen a triple-three lower then it completes a full pullback in Wave (ii). Thus the first reversal should reach back to the prior Wave b at 96.23. I susepct this will form Wave i of Wave (a) of Wave (iii).

Thus, a break below 93.10 and 92.80 would threaten a move to the 138.2% projection in Wave c at least which rests at 92.27. Anywhere below there implies a retest at the 90.88 low and potentially the 38.2% expansion of the 95.71-110.65 rally which is at 90.00.

• The Brief Daily Forecaster

Published on  Fri, Nov 21 2008, 03:35 GMT