After the break above the channel resistance line I'm looking for a rally back towards the top at 133.81 in a flat correction, which would mark the b-wave and should be followed by the c-wave lower towards at least 124.96 and possibly lower. Short term we would like to see minor support at 131.05 protect the downside for a break above 131.84 and more importantly a break above 132.27, which confirms a continuation higher towards 132.59 and 132.78 before my ideal target at 133.81. That said, it should be remembered, that all conditions for the flat b-wave rally already has been fulfilled, so we will have to be aware of signs, that the b- wave should be over and the c-wave decline ready to start.
The rally from 1.6558 to 1.6685 was a minor five wave rally, but it was a c-wave rally and not the first wave of an impulsive rally. That meant, that resistance at 1.6685 protected the upside for a break below the important low at 1.6558, which forced us to re-count the rally of the 1.6225 low. Instead of having a 1-2; 1-2 count, we have placed wave i from 1.6225 to 1.6798 and wave ii most likely ended with Friday with a low at 1.6427 (just below the 61.8% of wave i) and I will now be looking for wave iii higher towards 1.7353, where wave iii will 1.618 times longer than wave i. However, short term we need support at 1.6427 to protect the downside for a break above 1.6636, which would confirm that wave iii is developing. Only a break below 1.6427 will delay the upside for a decline closer to 1.6390 before higher again.
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