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The Daily Forecaster

Thu, Dec 4 2008, 02:37 GMT
by Ian Copsey

FX-Forecaster.com

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Bias:               Mixed - waiting for breaks

Daily Bullish

Price held within a tight range yesterday and thus we are left in the same situation. The medium view is still bullish but I cannot rule out an earlier decline to the 1.2467-18 area. If this is seen I feel it should provide a good base for a reversal higher. An earlier break above 1.2740-66 will bring this expected rally sooner. If seen look for price to extend through 1.2835 en route 1.2883 minimum. There is further further resistance at 1.2883. I suspect these lower resistance levels initially. Eventual target is around 1.2989-23.

Medium Term Bullish
1st December:  While I remain MT bullish it is looking as if we are going to see further 1.2480-1.2970 ranging before this finally breaks higher. Until then just watch reactions at the 1.2473-1.2518 support...

Daily Bearish

No break in either direction but I sense that there is now a slightly stronger risk of the dip to 1.2467-1.2518 first. There is support at 1.2645-50 and breach would raise this risk. If this support breaks then note the 1.2600 corrective low that may cause a small pullback but overall I feel then we should be heading lower through the 1.2561 low en route the stronger 1.2467-1.2518 support. However, I expect this to hold for a larger reversal higher. Only breach opens up a move below 1.2422, 1.2387 and down to the 1.2328 low.

Medium Term Bearish
1st December:   Friday's break back below 1.2690 should see price move back to the 1.2473-18 area. However, unless that breaks I am still more bullish. Thus only look for stronger losses below 1.2470 which would push the 1.2387-22 lows and possibly 1.2328.

Elliott Wave Comments

1st December:

The break below 1.2690 blew away the directly bullish picture. However, I still feel the move so far doesn’t really fit in with a MT bearish structure.

Therefore I am more inclined to think that given the 1.3080 high was a 76.4% retracement of the 1.3297 – 1.2387 decline that we have probably seen Wave ^a at 1.2387 and Wave ^b at 1.3080.

This provides us with a target for Wave ^c in the 61.8%-66.7% projection between 1.2473-1.2518. While this holds we should see Waves ^d and ^e develop within the range to complete Wave (b) before the larger rally in Wave (c) can develop.

Thus only below 1.2450 would pressure the 1.2387-22 lows and probably the 1.2318 low. At that point we need to resurrect the potential 138.2% projection in Wave (C) at 1.1885.

• The Brief Daily Forecaster

Published on  Thu, Dec 4 2008, 02:42 GMT