Not much has change since our analysis yesterday. We saw a test of the first minor target at 131.37 (the high was at 131.36), from where prices where rejected, but it should only be a matter of time before this minor resistance is broken for a continuation higher towards our next target at 132.48. As I said yesterday, this will not be a smooth ride higher. It will be bumpy with lots of moves, that seems out of character. However, I see the rally of the 124.96 low, as part of a very complex correction and nothing more than that. Once we have reached the target for this part of the correction, I will be looking for one more decline towards at least 124.96 and possibly even lower towards 118.73, but only time will tell.
Yesterday we did see an attempted to break above important resistance at 1.6756 (the high came in at 1.6762), but it failed and caused a deeper than expected decline to 1.6558. The decline below 1.6582 has forced me to change my short term count slightly. With the break below 1.6582 it was confirmed, that we still was in red wave ii. Red wave ii is an expanded flat correction and that means we will be looking for a extended red wave iii once it is confirmed, that red wave ii is over. I do think we saw the bottom of red wave ii at 1.6558 and red wave iii higher has begun, but we need a break above 1.6715 and more importantly a break above 1.6762 to confirm that red wave iii is developing for a rally towards 1.7490. Short term I'm looking for a move towards 1.6675 followed by a correction, which ideally will find support at 1.6632, but could take us lower to 1.6603 before the next rally higher.
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