An excerpt from FX-Strategy’s Pro Commentary
[B]Bias:[/B]Cautiously the 1.3650 support should hold for a rally through to 1.3735 and probably 1.3780
[B]Daily Bullish:[/B]We did see the 1.3605-20 area break yesterday but then a reversal from 1.3591. This appears to be just a deeper correction than anticipated and thus I still see the immediate prospect as bullish. We should first see the 1.3684 area cap for a pullback but while this remains above 1.3650 the upside still remains intact with a breach of 1.3684 calling for gains towards 1.3735 at least. I feel we shall see a pullback from here but this pattern would actually target the 1.3780 level before a larger reversal lower. [B]MT Bullish:[/B]I do feel we are close to a peak now and this should go no further than 1.3780. Thus only above there will attack the 1.3851 high but I find it tough to look for a break. ([B]31st August[/B])[B]Daily Bearish:[/B]While the short term direction still appears to be higher, there is a chance we could see the correction double up with any second rejection from the 1.3679-84 area dipping back below 1.3650 highlighting a vulnerability for a second decline back to the 1.3618 level and later back to 1.3591. However, this does look like a low risk. Indeed, if these losses are seen I would be tempted to think that we have just seen a deep pullback and thus the way would then be open for losses below 1.3545-62. [B]MT Bearish:[/B]We are on alert that a possible high has been seen with any break below 1.3539 looking bearish for the 1.3359-85 area which, once broken will extend losses to the 1.3262 corrective low and probably further. ([B]29th August[/B])
[B]ELLIOTT WAVE COMMENTS[/B]
The reversal higher yesterday does seem to be a Wave x with the only risk being that we shall see a flat Wave x which will mean a move back down to 1.3522-45 (50% retracement and prior Wave b) before the third ABC pattern develops.
However, for the moment I have labeled the rally to 1.3679 as Wave a and thus a 50%-61.8% pullback lies at 1.3605-20 and while this holds we can see Wave c rise towards the 76.4% retracement at 1.3735. I suspect this will hold but on the assumption that Wave b bounces from the support advised we should allow for a 138.2% projection which will take us closer to 1.3775-85.
Once this completes we should see stronger losses.
[li]FX-Strategy Pro Commentary[/li]Powerful analysis for profitable trading[/ul]