Bias: I suspect losses should now be seen to 0.6971 at least and possibly 0.6915
Yesterday's failure just below the 0.7267 high is not encouraging for a bullish stance and any break below 0.7031 would appear to end this potential. Thus only a move back above 0.70990 and 0.7120 would allow a retest at 0.7145-56. Take care around here. Only breach would resurrect the upside for 0.7185 and probably the 0.7267 high. This may stall price again but if we see breach then I suspect gains will extend through to 0.7310 minimum and probably 0.7351-68.
8th January: Failure to break above 0.7267 is concerning and we need this to occur quickly else the upside will look exhausted. Thus wait for this break and only then can we expect a move to 0.7351-68 initially and then the 0.7409 and 0.7461 targets.
Having failed for a second time at 0.7267 the downside is now looking stronger. While 0.7090 caps we could see this directly extending down through 0.7025-31 to reach the 0.6971 intermediate target. While this is likely to cause a pullback this is unlikely to be too deep and later should see losses extend to around the 0.6915 corrective low. Here I would expect a deeper correction. Next support is seen at 0.6849.
8th January: It certainly looks as if we have seen the top here and thus we should initially watch the 0.6915 area for a pullback but over time we should see this break for deeper losses.
ELLIOTT WAVE COMMENTS
The caution described yesterday was timely with the attempt at 0.7267 failing once again and from there it has been mainly one way. We seem to have seen a minor Wave i at 0.7125 and Wave ii at 0.7221 and this implies a 176.4% projection in Wave iii at 0.6971. Given Wave ii was modestly deep I doubt we'll see much more than a 41.4% retracement but the clear target for the first mvoe lower has to be the prior Wave -b- at 0.6915.
This should complete Wave -a- lower and thus cause a pullback in Wave -b-. In the much larger picture this would appear to suggest potential back to the 0.6006 low. However, in the meantime we should take note of the 50% pullback at 0.6637.