Pro Commentary Lite ... 15th May 2008 ... GBPUSD

 Price:                            1.9442

Resistance:	1.9474	1.9493	1.9546	1.9572
Support:	1.9428	1.9389	1.9363	1.9335

Bias:

While the 1.9474-93 caps there is still room for one more decline to the ideal 1.9300-35 target

Daily Bullish:	Once again the downside developed well although did overshoot slightly the 1.9382 intermediate target. It does confuse slightly but I still feel the downside has legs for one more decline. Thus only look for a stronger move higher if the 1.9493-05 area gives way. If seen then we should see stronger gains to 1.9546 and probably 1.9572 at least. Take care here as this could cause a correction. Breach extends gains to 1.9631-66 again.
MT Bullish:	15th May: With losses having come within a whisker of the ideal 1.9300-35 downside target we must be aware of the risk of reversal higher. Back above 1.9505 and 1.9572 would see 1.9631-66 and probably higher.
Daily Bearish:	Further downside progress seen but we are close to a potential low. To see this last leg lower I’d prefer to see the 1.9474 resistance hold but should allow for 1.9494-05. This resistance should allow a move back below 1.9428 to 1.9389 at least – take care here in case a sideways consolidation develops. More likely we shall see a direct test of the 1.9301-35 target from where a larger recovery is anticipated. Only breach would trigger stronger losses to 1.9223, 1.9175 and 1.9097.
MT Bearish:	14th May: The downside has developed and should make its way down to the 1.9300-35 area. However, bullish divergences are forming in the daily chart and I suspect this will hold for a stronger recovery.

 

ELLIOTT WAVE COMMENTS

15^th May

Progress is being made in Wave (c) which has a wave equality target at 1.9301 while the old daily low was at 1.9335. Within the daily flat correction I am looking at we should see this support hold and generate a stronger move higher.

Within the decline I count yesterday’s low at 1.9363 as Wave iii and thus while Wave iv remains below the 50%-58.6% retracement at 1.9474-93 the way is open for the last decline.

A break above 1.9505 would cause an earlier reversal higher.

Below 1.9269 would maintain stronger losses for the 161.8% projection in Wave (c) at 1.9097.

Ian Copsey