We saw a move closer to important support at 126.43 yesterday, but no real follow-through, which means the tug of war between the bulls and the bears is still ongoing. I still favor the downside slightly over the upside, but as long as support at 126.43 has not been broken we could still see a new rally above minor resistance at 129.99 and more importantly resistance at 130.67, which would call for one last rally higher towards 131.27. On the other side a break below important support at 126.43 will confirm, that the bears has won the tug of war and indicate that wave 5 and (1) ended at 131.12 and wave (2) is developing for a correction back to at least 118.73.
The failure to sustain the break above 1.5577 confirmed that an even more complex correction was developing. The correction went from a flat correction into an expanded flat correction. Short term we are looking for one last decline into the 1.5328 - 1.5338 area from where wave iii is likely to take over an develop into an extended rally. When we see an expanded flat correction we should expect the following impulsive move to extend meaning that it would be longer than the first impulsive move we saw and in this case, that was the rally from 1.5080 to 1.5577. That Means, that once wave ii is done we can calculate the most likely ending point of wave iii. The first target we expect will be where wave iii is 1.618 times longer than wave i, which would call for a rally towards 1.6145 and possibly higher, but time will show.
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