An excerpt from FX-Strategy’s Pro Commentary
Bias:Cautiously I feel we may have seen a low here but suspect we may see a deep pullback
Daily Bullish:Losses stalled right at the mid point between 1.3253-73 amid a deep bullish divergence and there is a risk we have seen the major low expected. The 1.3314 level appears to provide the break point for additional gains though these may not get too far initially. If this breaks cleanly then expect a move to 1.3333 and after a pullback to 1.3365-68 which should cause a larger pullback. Next resistance is at 1.3415. MT Bullish:The move back below 1.3391 means we need to postpone expectations of a move higher. I suspect we shall see a test of 1.3253 minimum and possibly 1.3203 first. Only above 1.3464-75 -> 1.3553+ (June 11th)Daily Bearish:Having seen the 1.3253-73 support area there does appear to be an argument for a low having been seen. I’d like to keep an open mind given the lower targets at 1.3203-24 but will only begin to look for these if we see a break back below the 1.3274-82 area. If seen then watch the 1.3253-62 zone and only on break look for extension to 1.3203-24 which should be the maximum downside. MT Bearish:Loss of 1.3391 implies a test of 1.3253 minimum and probably 1.3203. I feel this would cause a larger recovery. Only below 1.3177 would trigger additional MT losses… (June 11th)
ELLIOTT WAVE COMMENTS
The break below 1.3295, albeit only by 7 points would appear to point to a direct loss which would mean that the 1.3553 high was more likely to be a Wave –b-. If that is the case then a 138.2% projection in Wave –c- is at 1.3253 (a prior Wave b) and a 161.8% projection at 1.3203 (a 58.6% retracement in Wave (B). This would imply that the 1.3319 low was a minor Wave iii and the 1.3369 high as Wave iv from which we can target the 1.3203-24 area being a 61.8%-76.4% projection in Wave v.
We are on warning that we may have seen a major low with price falling just 9 points short of the 138.2% projection in Wave –c-. The 161.8% projection lies at the 58.6% daily retracement at 1.3203. A break back above 1.3370 warns of follow-through higher.
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