Bias: While there is a small risk of extension to 88.42 I feel the upside is more likely today
The 88.89 target was met perfectly yesterday and with bullish divergences in both hourly & 4-hour charts we should be aware of a reversal higher. There is a mixture of resistance levels between 89.37-60 which could be tough to breach initially. However, I feel this will eventually break to extend gains to 89.90-95 and probably closer to the 90.20 peaks. I suspect this may well hold for today to cause a correction lower. Thus only a break above 90.25 would maintain the upside risk for 90.60, 91.05 and stronger resistance at 91.55-65.
13th January: I suspect the 88.42-88 area will support for a stronger reversal higher. It may well be choppy but overall the target should be in the 93.61-00 area approximately.
Losses maintained a direct decline that eventually reached the 88.89 target support from where we have seen a pullback. While I feel that a larger reversal higher is in progress there is one last risk that we could see a final dip lower to 88.42. There is support at 89.20 and breach would threaten the 88.88 low, breach implying a test of the 88.42 lower target support. If seen I feel it will hold for a reversal higher. Breach would surprise but imply follow-through close to the 87.12 low.
9th January: The 91.77 support gave way and this opens risk of additional losses beyond 90.43. Below there sees another support area around 89.75-98 but by this point I feel we should be looking for losses to 88.41-89 at least.
ELLIOTT WAVE COMMENTS
I did say that a bullish structure was stretching credibility and the break of 90.40 has all but squashed any potential for the move up to 100.54. I am taking the move to 94.62 as having developed in 3 waves. This could of course indicate that the correction is complete and thus it represents Wave (b) and thus we are seeing Wave (c) (of Wave (iii) developing. Wave (iii) has a minimum 138.2% projection at 73.22. I feel it is too early to be talking of this target.
Therefore, more likely we are seeing a complex correction and given the falling long term cycles I feel this is more likely to be a triangle. A 76.4% retracement in Wave ^b lies at 88.89 but allow for mild overshoot to a corrective low at 88.41 or the 85.6% retracement at 88.20. While this area holds the next leg will be higher.
Only directly below 88.20-41 would then imply a retest of 87.12.
Target met in Wave ^b and as long as the 88.42-88 area remains supportive the next move should be higher in Wave ^c that has a 66.7% projection at 93.61.