Yesterday, I traced out the move down from 1.4346 as being impulsive with the price action rise from 1.3970 possibly being a 4th wave. That wave topped at 1.4133 and price began to decline but only got as far as 1.4014 (two candles on the hourly chart were at that low). Since then, price has risen again with two candles topping on the hourly chart at 1.4094. Calculating this as an ABC correction from 1.4014 with A topping at 1.4093 and B dropping to 1.4044, results in 1.4093 being .618 of the A wave. Wave C would equal A at 1.4123 and would be 1.618 of A at 1.4173. However, if it continues to the latter two levels it is solidly within the resistance zone I wrote about yesterday of 1.4106 to 1.4162. In addition, an inviolate Elliott rule is that wave four cannot enter wave one's territory and that would be no higher than 1.4139. Therefore, resistance is at 1.4139. Beyond that, is 1.4233 and 1.4346.
The highest probability appears to be another move down. Note, though, that the pair is forming an ascending triangle on the hourly chart.
On the daily chart (not shown), the 1.3970 low formed a hammer so a drop below would be bad news. Support is at 1.3970, 1.3937 and 1.3863. 1.3521 is the daily uptrend line from last June.
Here is the hourly chart.
© Dianne Fecteau, 2011. 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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