As I've been saying this week, I'm assuming this is wave C of an Elliott Wave zigzag correction. Wave A's length was 591 pips (1.2467-1.1876). C has a potential target of either .618 the length of A (1.2517), the length of wave A (1.2743), or 1.618 the length (1.3108). It could also go to just above wave A, say 1.2480 or so. That's Elliott Wave precision for you. But none of those mean a thing unless the pair can break through its current resistance. It stumbled at 1.2304 yesterday morning; today it's stumbling at 1.2344. In addition to other resistance it's at the top of a short-term channel that could lead to a correction down to 1.2126. Other nearby support is at 1.2223 and 1.2194.
This channel could also be looked at as a bull flag. If one took the length of the flagpole (591 pips) and added it to 1.2467 you see 1.3058. Price action combined with momentum should make things clearer soon. I'll probably add to my position if there's a clear upward break from this channel.
Here's the three-hour chart:
© Dianne Fecteau, 2010. No part of this material may be reproduced in any form, or referred to in any other publication, without the express written permission of the author.
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