The price action we saw yesterday is in no way supportive for an imminent decline. Rather it flashes, that we will see one more attack towards the upside closer to 130.59 before the next decline can be expected. Only a direct break below 129.69 and more importantly a break below 129.39 confirms, that we are ready to explore the downside again. Looking at the larger picture I still think, that wave II is incomplete. We have two options a long sideways consolidation between 124.96 and 133.81 or a deeper decline towards 118.33. I still favor the deep decline towards 118.33, but there is clearly a tug of war going on between the bulls and the bears. So we will just have to wait patiently.
I still believe, that the rally from 163.90 to 1.6688 was an impulsive wave i and the ongoing decline from 1.6688 is a wave ii. Second waves are allowed to correct 100% of the first wave, but it can never ever break below the start of the first wave with as much as a single pip. That mean, that we can go as low as 1.6390, but not below. That said, I'm looking for one last decline below 1.6452 before this ongoing wave ii finally comes to an halt and wave iii higher can take over. As I said yesterday there is a slim chance, that this is an other x-wave, which would ultimately call for a break below 1.6390 for a continuation lower towards 1.6249, but that is not my preferred count and will only become the preferred count if we break below 1.6390.
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