My preferred count shows that a wave iv triangle is developing and we are currently seeing wave d of the triangle developing. A triangle under the Elliott Wave Principle has five waves and is a continuation pattern, which is why we expect one last thrust towards the upside once this triangle is finished. Short term we expect to see minor support at 127.83 protecting the downside for a break above 128.52 confirming a continuation higher towards 129.39 and likely closer to 130.00 before wave d is over and the final wave e develops to the downside.
Yesterday we did see a minor break below 1.5255, which under normal conditions would call for a new low below 1.5236, but the decline from 1.5395 stopped dead at 1.5252 and rallied in an impulsive manner. Therefore we think that we saw a rare Fifth wave failure, which is a sign of underlying strength. However, to confirm the fifth failure we need a break above 1.5395. Short term we expect minor support at 1.5324 to protect the downside for the next move higher towards 1.5405, from where we should expect a new set-back towards 1.5324 before we get to see some real acceleration towards the upside and a rally towards 1.5611.
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