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British Pound Breakout Opportunity

Wednesday, 21 May 2008 20:14:12 GMT

Written by Jamie Saettele, Technical Currency Strategist

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A complex correction (W-X-Y) is unfolding since the 1/22 low at 1.9337.  Support is clearly strong above 1.9350, which led to a triple bottom.  The final leg of the correction is underway now and should lead to a thrust above 2.04 by mid-July.  Near term, the pair is sitting at a resistance line but a break through would shift focus to 2.00.

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Very short term, the rally from 1.9362 could be a series of 1st and 2nd waves.  Support is strong at today’s low (former resistance from multiple daily highs served as support).  Risk is tight at 1.9612 and upside potential is 4 x risk.

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