An excerpt from FX-Strategy’s Pro Commentary
Bias:Mixed – waiting for breaks
Daily Bullish:The sharp pullback to 162.59 was followed by an equally sharp recovery that hasn’t quite reached the 163.92 high. Indeed, there does appear to be risk of a pullback but while this remains above 163.34-50 the original upside targets remain. Only an earlier direct break above 163.92 would start pushing higher immediately with 164.34 the next resistance which should be watch for signs of possible reversal. However, my favored target remains at 165.05. MT Bullish:The break back above 162.30 has been seen and this swings us rather frustratingly back towards a bullish stance. Indeed, a move back above 163.58 would imply gains to 164.34 & probably 165.05. (May 14th)Daily Bearish:We did see a second move down to 162.85 and just below but the strong recovery looks more positive. For today we need to observe the risk of a pullback to the 163.34-50 area but suspect this will hold. Thus only a clean break of 163.30 would provide a deeper move down to 163.10 and probably 163.67 once again. Break there is required to confirm stronger medium term losses. MT Bearish:It still looks as if we should see a move to the 165.05 target before the downside can develop more strongly. Only a direct loss of 162.65 would suggest an earlier decline. (May 16th)
ELLIOTT WAVE COMMENTS
We only saw 163.88 but label this as Wave -iii of Wave –c-. While a 50% retracement at 162.86 supports we can then look for Wave v to project higher by 76.4% to the 165.05 target which is also where Wave –c- will equal Wave –a- and Wave –v- will have projected by 76.4%.
The pullback was slightly deeper than the 162.86 level but the reversal from 162.57 suggests that this was Wave iv and thus we can generate a 76.4% target for Wave v at 164.74. I also note the daily 66.67% projection at 164.34 and 76.4% at 165.05. An end to this rally is imminent.
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