An excerpt from FX-Strategy’s Pro Commentary
Bias:While 1.3550 supports there is still room for a correction to 1.3588-13 but the larger risk is lower
Daily Bullish:We have seen losses as expected which have reached the 1.3550 target and 10 points more to 1.3540. Overall we are bearish. However, we may find that we do not see direct losses. While 1.3550 supports there is actually chance of seeing a move back to 1.3588-1.3613 but this is the maximum we expect to see. Thus a more bullish stance will require a break back above 1.3613 and if seen will generate a stronger test of 1.3636 and probably 1.3666 which somehow we feel would be broken also. MT Bullish:First resistance is at 1.3590-1.3616 but with the direct rally we must also now be prepared for a test of 1.3666. Only above 1.3700 would cause further strength to 1.3932-1.4016. (April 18th)Daily Bearish:We have seen the expected decline to 1.3550 as described yesterday and the nature of that decline looks more bearish. However, the only issue we have is the risk of a possible longer correction than we have seen already. There is support at 1.3550 (and we should also take care of a direct move lower to test 1.3522) which could generate a reversal back to the 1.3588-1.3613 area. However, from here or a direct break below 1.3522 we shall look for losses to be more aggressive and reach the 1.3440 & 1.3372 areas.MT Bearish:Note resistance at 1.3590-1.3616 and then 1.3666. One of these two areas should cause a stronger decline. Note support at 1.3440-50 and further out at 1.3240. (April 16th)
ELLIOTT WAVE COMMENTS
We still need to be cautious as we have seen the move back to the 1.3540-50 area as suggested which could be interpreted as an expanded flat from 1.3615. However, the move lower to 1.3540 appears to have developed in 3-waves and this tends to imply a more bearish structure.
This would imply that 1.3540 was Wave (i) with a 50% pullback at 1.3588 which we have also seen. However, we have a small suspicion that Wave (ii) could last a bit longer in a flat or expanded flat back to 1.3588-1.3613.
Break below the 38.2% expansion at 1.3522 would extend in Wave (iii) to the 138.2% projection at 1.3450-54 initially. Take note of the 223.6% projection at 1.3372.
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