Resistance at 128.17 did protect the upside for a break below 126.16 which has open up the downside again for a new challenge of important support near 124.96 and once this support breaks we should see a powerful decline towards our target at 118.73, where wave 2 will have corrected 38.2% of wave 1. Short term we could see a little more upside towards 126.55, but we should not see a break above 127.01 as that would indicate a new rally higher towards 128.29 before down again. However, a break below 125.81 and more importantly a break below indicates, that the next real downside pressure has begun.
With a low at 163.88 (just 11 pips below my ideal target at 1.6399) we have most likely seen the bottom of wave iv and should now see wave v higher. We still need a break above important resistance at 1.6590, but a break above here will confirm the bottom is in place at 1.6388 and call for a rally higher towards 1.7640 as the ideal target for wave v. Short term I would like to see support at 1.6465 protect the downside for the break above 1.6590, but we must allow for a move all the way down to 1.6388 before the next rally higher. However, support at 1.6388 can not be broken with even a single pip as that would invalidate my bullish call.
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