Bias: Until 1.1124-32 breaks there does seem more risk for a correction lower
Yesterday saw price pushing higher more directly than I thought it may and even reached to the very top of the higher target at 1.1103.24. I suspect therefore we are due a pullback. Thus any further gains are going to require a break of 1.1124 and also the small corrective high at 1.1132. If seen then expect gains to extend to 1.1167 minimum and probably the daily pivot resistance at 1.1200. Take care here as this has a strong chance of forcing a correction. Next resistance is then found at 1.1266.
6th January: With the 1.1103-24 target met there is now risk of a pullback but while this remains above 1.0865 we should see price extending gains. Note resistance at 1.12, 1.1266, 1.1333 and stronger at 1.1440-1.1499.
The 1.1124 high is quite critical and while this caps (allow for 1.1132) the risk does seem higher for a correction. A clear break level is not obvious but I suspect a drop through this morning's low at 1.1070 will assist down to 1.1030-50 and a break here would allow a choppy decline. Note support areas around 1.0944-75, at 1.0912 and the most we should see is 1.0869. Only below 1.0850 would imply a stronger push back lower with next support at 1.0747.
6th January: With yesterday's rally we can raise the reversal level to an aggressive 1.0860 but should also note 1.0747. Below this latter support implies a stronger reversal lower.
ELLIOTT WAVE COMMENTS
The 138.2% projection in Wave iii is at 1.1124 - which we saw tested yesterday and given this is just below the prior Wave b at 1.1132 I feel we are due a pullback in Wave iv. A 41.4% retracement lies at 1.0912 and a 50% at 1.0869 and within this area I will expect a reversal back higher to push above 1.1124 in Wave v. Note the 50% retracement of the 1.2296-1.0370 decline lies at 1.1333 and this may well provide the target.
Any direct break above 1.1124 would imply a more aggressive rally to the 176.4% projection in Wave iii at 1.1266. However, also note the daily pivot resistance at 1.1200.
Any unexpected loss of 1.0850 would concern and cause a drop to the 50% retracement of the rally from 1.0370 which lies at the 1.0747 pivot support. Also note the 61.8% and 66.7% retracements at 1.0658 and 1.0621.