Pro Commentary Lite ... 22nd August 2007 ... GBPUSD

An excerpt from FX-Strategy’s Pro Commentary
Price: 1.9810

[B]Bias:[/B]While 1.9867 caps there is still risk down to 1.9684-1.9716 at least
[B]Daily Bullish:[/B]The downside has developed rather erratically and we need be cautious about any gains. The support areas to look out for are at 1.9684-1.9716 which should cause a pullback. However, assuming this is correct this would imply a cap around 1.9870-00. If the 1.9684 support gives way then we could see a loss to the 1.9621-49 area – again I feel this should cause a pullback. Only an earlier break above 1.9906 would pressure the 1.9935-50 area but this is quite strong. [B]MT Bullish:[/B]The old daily support line is now just above the 1.9935 corrective high and this still provides a barrier to the upside. Thus only above 1.9950-65 would force price back to 2.0055 – max 2.0125. ([B]22nd August[/B])[B]Daily Bearish:[/B]We have seen price edge lower in an erratic manner and this appears to increase the risk of a sideways correction. As such we should see resistance at 1.9867 remain intact with a break below 1.9800 and then 1.9760-70 trigger follow through down to 1.9716 and possibly between here and 1.9684. Watch this area as this may cause a larger pullback within a sideways consolidation. Only below 1.9684 would threaten the 1.9621-49 area again. [B]MT Bearish:[/B]I feel we shall see a shallow sideways correction between 1.9648 and 1.9935-59 before the next leg lower towards the 1.9169-1.9267 area. ([B]20th August[/B])


[B]20th August:[/B]

The 1.9648 low is now labeled as Wave [iii]. The correction from there has reached the prior daily support line and thus we are likely to see a sideways consolidation in Wave [iv]. This could be either a triangle, flat, or expanded flat – and I favor one of the latter two. Watch first the 76.4% retracement at 1.9716 which is just above the 1.9684 Wave b low of the correction higher. If this holds the triangle scenario becomes stronger. However, I would expect that more likely we see a flat correction – thus bouncing from 1.9648 again but remaining below 1.9935-59 (the upper level being a 38.2% correction in Wave [iv]. If we see a move below 1.9648 then a 38.2% expansion lies at 1.9538.
[B]Ian Copsey[/B]
[B]See Also[/B]

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