Bias: Mixed – waiting for breaks
Apart from the spike to the 1.4070 area price basically held within a 1.3838-1.3990 range. I am mixed between two scenarios and therefore want confirmation. A bullish scenario would require a break above the 1.3961 resistance seen so far this morning and then also 1.4000. If this is seen then it would begin to suggest that we should see additional gains. Closer resistance is then seen at 1.4045-50 but I suspect a move all the way to 1.4098 where a correction is possible. Also note the larger resistance at 1.4220-24.
2nd January: The recovery stalled just below 1.4376 and I therefore suspect it is complete. Only back above 1.4256 would imply a second attempt towards this high.
Price couldn't break below the 1.3838 low and this is still needed to generate additional losses. Close support is at 1.3902 with breach providing impetus for a move to retest 1.3838 and probably then 1.3796 at least. Frankly, if seen I feel it will break to generate stronger losses but it would be best to be cautious at this support area. Below 1.3796 would see 1.3753-70 minimum but the stronger argument will be for losses that would move below the 1.3680-10 congestion towards 1.3664 and more likely the 1.3559-76 support.
5th January: The 1.3838 low is proving more stubborn than expected and we should also note 1.3796. Only breach would open up stronger losses for 1.3559-76 and while this could cause a correction there should ultimately be further lows.
ELLIOTT WAVE COMMENTS
While price did edge above the prior Wave b at 1.4306-21 it stalled just below the 61.8% retracement at 1.4362. The next question is whether this is Wave x or possibly a Wave -ii- (if the 1.3824 was in fact Wave -i-.) At this point I am more in favor of this being a potential larger triangle structure with Wave ^A likely to have been at the 1.4717 high - a move that came in 3 waves.
Thus I remain bearish to the 76.4% retracement of the 1.2328-1.4717 rally which lies at 1.2892 but this seems likely to come in a triple three. The next question is that if 1.4362 was Wave x and the 1.3916 low was Wave a - then what are we seeing now? The move higher this morning does suggest a more complex correction, either in a triangle or possibly in an expanded flat. The expanded flat would imply a move above 1.4070 towards 1.4110 and 1.4164. Above there would imply a retest of the 1.4220 high and maybe a little more - max 1.4256. Below 1.3796-38 would imply more direct losses with a 138.2% projection in Wave c at 1.3598 and a 161.8% at 1.3492…