An excerpt from FX-Strategy’s Pro Commentary
[B]Bias:[/B]I suspect we should see losses to the 1.3394-1.3403 area at least
[B]Daily Bullish:[/B]The 1.3545 has held but price traded sideways without penetrating the 1.3435-56 support and this remain important for the downside to develop. Until that occurs there is a small risk of seeing a second move higher with initial resistance at 1.3507 and if this breaks then we should retest the 1.3545 high which should then imply a test to around 1.3590-00 but that should hold if seen. Next resistance is at 1.3647-63 and 1.3708. [B]MT Bullish:[/B]I still prefer to wait for a test of the 1.3240-80 area and only a prior break above 1.3600-10 would imply the downside is complete and would force a move back to 1.3708 and probably to 1.3770-80 again. ([B]21st August[/B])[B]Daily Bearish:[/B]No break of 1.3435-56 has yet been seen but I suspect we shall see this today. For a direct bearish structure I’d like to see 1.3507 cap and cause losses through 1.3430 which should then attack the 1.3394-1.3403 area. Care as this may hold and cause a longer sideways consolidation. Thus only a break below 1.3390 would push the 1.3359 low once again but should stall for a while in that area for a pullback. [B]MT Bearish:[/B]We seem to be in the last leg of the decline and while the 1.3600-10 area caps the risk is still lower to the 1.3225-75 area before we see a larger correction higher. ([B]21st August[/B])
[B]ELLIOTT WAVE COMMENTS[/B]
It does seem that we saw the Wave [iii] low at 1.3359. The move back to 1.3545 was an approximate 38.2% retracement in Wave [iv]. What is uncertain is whether this completed the correction (NB Wave [ii] was very deep and thus Wave (iv) could be quite shallow. If this is the case we should be a little cautious about a complex sideways correction developing – maybe a triangle or flat correction between 1.3359-1.3545.
Right now, if the 1.3545 peak is Wave [iv] then a 61.8% projection provides a Wave [v] target at 1.3241 and a 66.7% at 1.3217. I feel that this area should limit the downside. However, keep in mind a 76.4% projection at 1.3169.
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