The break below my invalidation point at 126.03 we are left with two options. 1: The entire five wave rally rally since 94.10 ended with the test of 131.12 and if this is the case we are looking for a large corrective wave 2 down to at least 118.73. Looking at the decline from 131.12 is does have impulsive characteristics, which would be what we are looking for in a simple zig-zag correction. The second option is that some kind of ending diagonal is developing calling for one more high above 131.12. I do not favor this options, as ending diagonal is made up of five three wave moves, which does not fit this the rally from 118.73. The reason why I'm hesitating a bit calling the top is, that the EWO-indicator does not show us any significant divergence, which I would normally expect at the end of a rally of this degree.
My description of the rally higher yesterday has been a perfect match. With the slight break above the 1.5512 top confirms, that an important bottom is in place at 1.5080 and that a new major rally is developing. We have wave i of this new major rally in place and are now looking for wave ii. This wave ii should correct between 50% and 61.8% of wave i, which would mean a decline towards the 1.5263 - 1.5319 area before the next rally higher. However, we must remember that second waves are allowed to correct even more of wave i. Once this wave ii correction is over we should see and even more powerful rally high towards at least 1.6100, but I would not be surprised to see an even bigger rally towards 1.6578. But for now we should remain focused on the wave ii correction towards the 1.5263 - 1.5319 area.
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