Pro Commentary Lite... 19th April 2007 ... GBPUSD

An excerpt from FX-Strategy’s Pro Commentary

Price: 2.0034

Bias:Cautiously we are bearish which should mean the 2.0093-2.0138 area should remain capping
Daily Bullish:Price stalled a few points below the 2.0138 resistance and this is a very, very significant level. If we are to see any further gains we must see the 2.0030 remain intact and cause a reversal back above 2.0060 and then 2.0093 to generate a retest of the 2.0131-38 resistance. Above here would retain the overall bullish tone and allow follow-through to 2.0194 and 2.0225. MT Bullish:We have achieved the 2.0078 target – and just a bit more. We have to be aware of acceleration higher – but only above 2.0138 confirms and suggests 2.0229 and then higher with 2.05 a possible target. (April 18th)Daily Bearish:In some ways we are rather surprised by the peak at 2.0131 as this if this remains intact over the coming weeks it implies a long term bearish move. For now we will concentrate on support at 2.0030 which has just been tested. If this breaks then look for follow-through to 1.9974 at least – care as this could cause a pullback. Breach would extend lower once again to 1.9900-30 which needs to hold to keep alive any direct medium term bullish picture. MT Bearish:We have seen test of the 2.0078 target but also a small breach. We could take a test of 2.0092-00 and at most 2.0138 but for the downside to develop we require a break below 1.9900 to confirm larger losses. (April 18th)


19th April

Well, well, well… the 2.0138 resistance has capped. It is still too early to confirm but this represented a 23.6% expansion of the decline from 1.9548 to 1.7046. If it remains intact over the coming 2-3 months it would actually imply a multi-month decline back to 1.70…

Too early to even rely on that but for now we feel the evidence suggests we should see losses. A small 138.2% projection has been tested at 2.0030 this morning and if this breaks we should begin to see more losses towards an alternative possible Wave iv at 1.9900-30 (being a 50%-58.6% retracement.) Thus, we await this break to confirm a medium term bearish picture.

Ian Copsey
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