Forex Technical Analysis 04 October 2007

Pro FX Commentary: GBPUSD

Price: 2.0318

Resistance: 2.0330 2.0356 2.0390 2.0414
Support: 2.0308 2.0280 2.0251 2.0221

GFT Forex

Bias: Care - waiting for breaks though momentum gives a more bearish structure

Daily Bullish: The loss of 2.0318 along with bearish momentum is changing the picture and this suggests a strong risk of additional losses. I therefore need price to demonstrate strength to get more bullish. We have already bounced from the 2.0330 resistance and it is above here that would give some relief but there is resistance still at 2.0356 to overcome to generate a stronger recovery. If seen then we can look for the upside to regain strength for 2.0414 and probably 2.0440-50 - care this could cap.
MT Bullish: Yesterday's deep pullback doesn't alter the fact that we should see price higher but this now maybe contained by 2.0593. Watch support at 2.0221-51 as a base for the next rally. (4th October)
Daily Bearish: Momentum still looks bearish and while the 2.0330 (max 2.0356) resistance caps there does seem more risk of losses to 2.0280 minimum and possibly 2.0251-68. Take care if seen as this could provide support. Only breach would extend to 2.0221 before higher. Next support is at 2.0174.
MT Bearish: It seems like a deeper correction has come sooner rather than later but there remains good support at 2.0221 (max 2.0174) and only below here would trigger stronger losses back to 1.9877 & below. (4th October

Elliot Wave Comments

GFT Forex

4th October

While the Fibonacci relationship doesn't really hold, the break of 2.0318 with bearish momentum is suggesting the 2.0493 high may have been the end of Wave -iii-. If so, then we are seeing Wave -iv- develop that has a 41.4% retracement at 2.0268 (and a minor 138.2% wave extension at 2.0251) while a full 50% lies at 2.0221.

From here we would then either expect a larger sideways consolidation (possible flat or triangle) in Wave -iv- or a direct rally in Wave -v- to the 2.0593 wave equality target in Wave (c).

Also note, just in case a 58.6% retracement in Wave -iv- at 2.0174.

By: Ian Copsey
Global Forex Trading

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