| Resistance: | 1.2846 | 1.2884 | 1.2918 | 1.2980-95 |
| Support: | 1.2775 | 1.2742 | 1.2706 | 1.2666 |
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Bias: The 1.2980-95 area must cap to retain a more bearish stance else deeper gains
Daily Bullish
Losses were seen but stalled much higher than expected. This doesn't automatically mean a more bullish picture but there is also a long way to confirm a bullish one. Initial resistance is at 1.2884 and this will need to break to maintain the upside which would then suggest a rally to the 1.2980-96 area at least. Take care here as this seems quite firm resistance. Thus only breach of 1.3000 would imply stronger follow-through to 1.3056-87, 1.3148 and if this breaks there will be a growing risk of a retest at the 1.3297 high.
Medium Term Bullish
31st October: Price I think there is a strong risk we have seen the top for now. Only a break back above 1.3297 would extend towards 1.3409.
Daily Bearish
The fact that the losses stalled at 1.2666 is a little concerning but I can't say that the bearish structure has yet broken down. It does seem as if the upside should develop in early trading but while this is limited to 1.3980-95 the downside still remains possible. From there or an earlier break below 1.2706 followed by the 1.2666 low should then allow losses to 1.2556-81 at least. This will be an interesting support area. For there to be a stronger decline then this must break and see losses break below 1.2396-40 en route 1.2328.
Medium Term Bearish
31st October: The 1.3250-85 resistance area basically held and as long as we see break of 1.2730 the risk is lower to 1.2581 and 1.2556. Around this area we then need to observe the reaction. Breach should maintain the downside for a retest of the 1.2328 low.
Elliott Wave Comments
31st October:
While we shouldn't forget the deeper 58.6% pullback at 1.3409 it does seem more likely that yesterday's 1.3293 high provided the peak in Wave -iv-. If this is correct then it will imply losses in Wave -a- of Wave -v- to the 1.2328 low. On the way there I see potential for the initial decline from 1.3293 to 1.2806 to extend losses to the 223.6% projection in Wave iii to the 1.2581 pivot support. Following a correction in Wave iv the next leg lower in Wave v should end close to the 1.2328 low.
In the short term we should just be aware of a the risk of an expanded flat with a 38.2% expansion at 1.2730. If we see a bounce from here we should see the 1.2992 high again and maximum the 1.3036 area. From here expect the sharp decline to 1.2581.
Therefore, if the bearish stance is incorrect then a break above 1.2992-36 will confirm a second test of 1.3293 - but do take care of the trend support in the run up to 1.3293 which is current around 1.3200-30. Above 1.3293 sees extension to the 58.6% retracement in Wave -iv- at 1.3409.
