Bias: Mixed - waiting for breaks above 89.70 & 90.87 or below 87.92 & 86.72
The 89.52-70 resistance has placed a cap on price so far and this still remains the area to breach to provide for a more bullish outlook. While a direct move higher is possible we shouldn't see a break below the 88.50-57 area. If this break of 89.70 occurs look for follow-through to 90.10 at least and potentially 90.55-87. Both of these areas do have potential to cause a pullback so take care. Any final breach would cause gains to the next resistance zone at 91.42 then 92.12-35.
22nd January: The only way we will avoid a direct drop is if we see price push all the way back higher to 94.62 again. I have my doubts that it can. Above 91.29-55 will be needed to suggest this is possible.
Yesterday was overall a bearish day with losses stalling just below the support at 88.10. This does seem to provide a break level for additional losses though I do also see support at 87.92 also. Thus wait & watch and if we see this break then expect extension to 87.11 again and possibly 86.72. If seen this should provide temporary relief and overall the larger picture will have confirmed the larger downward cycles which should bring persistent losses over the coming weeks.
22nd January: We must be very aware of the significant downside risk here. A break of 87.12 would heighten the chance we shall see a move through to 83.74 initially and later to the historic low at 79.70.
ELLIOTT WAVE COMMENTS
The thread holding the triangle scenario snapped. The loss to 87.11 could be interpreted as Wave b of a flat correction but it does strike me as a desperate hope. I shall cover this potential but frankly we are going to need a break above the prior Wave b at 90.15. If seen then the chances of a retest at 94.62 are raised.
Monthly and weekly cycles are exceptionally bearish for 6-9 months and it is this time frame which has dissuaded me from being directly bearish. The last time this cycle made a low was at the 79.70 historic low. Given the the recovery ended relatively quickly in the span of the cycle it does imply a new historic low. .
A break below 88.00 would imply a third attack on 87.11 - breach would set the wheels in motion for an initial test of the 138.2% projection in Wave iii at 83.74 but the 138.2% projection in larger Wave (iii) has an implied target at 73.22...