The break below support at 124.83 was the first warning, that wave 3 could be over with the test of 126.97. Also the fact, that we had a throw-over of the channel resistance-line and now has broken back into the channel is a warning of a possible top. That said, we still need the final confirmation, which a break below 123.87 will provide. A break below 123.87 will leave us with a an overlap between the possible wave four and wave one of wave v, which is not allowed under the Elliott Wave Principle and therefor will tell us, that a top is in place already. If wave 3 is already in place and we have begun the bigger wave 4 correction, what can we expect? As wave 3 is clearly extended we should expect a minimum correction down to the 23.6% retracement target at 120.68, but a more normal target would be the 38.2% correction target at 116.79, which also marked the bottom of wave iv of one lessor degree. However, as long as support at 123.87 has not been broken we could see one last rally higher, but we need a direct break above 126.05 to confirm that.
We are currently testing the new possible base-channel support-line and it will ideally protect the downside for a break above minor resistance at 1.6043 and more importantly a break above 1.6134 to confirm the next rally higher. However, as long as minor resistance at 1.6043 and more importantly resistance at 1.6134 is not broken we could see a move down to 1.5936 and even 1.5881 and still keep the uptrend alive. It will take a break below 1.5750 to invalidate our present count and call for a much deeper decline.
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