We are in a consolidation after the break above the Base channel resistance-line, but as this line continues to act as support we can expect prices to take off any time. Wave 3 is the wave we will normally expect to extend an be longer than the two other impulsive wave. If wave 3 is going to be equal in length to wave 1 that will give us a target of 110.85, which is very close to the March 2012 top at 111.43. However, we should be looking for clues that this wave extends and becomes longer than wave 1, which would give us a target of at least 117.31 and possibily even higher.
Short term we expect support at 106.84 to protect the downside for a break above 107.67 which calls for the next rally higher towards the next minor targets at 108.33 and 108.89, but the next major target is at 110.83.
Another small wave ii is building, which will likely cause a correction to 1.5840, before the next rally higher sets in for a break above 1.5907, that confirms the next rally higher towards 1.5989. However, longer term we do expect much higher levels here and the next major target is at 1.6967, which was the top in May 2012. As we showed yesterday, that we have broken above the major ending diagonals resistance-line, which should cause a major rally back to the start of the ending diagonal, which in this case will be at 1.8133 and likely even higher at 1.9571.
However for now we should concentrate on the small correction from 1.5927, which ideally will terminate close to 1.5840 for the next rally higher
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