Trend: Near term down
New strategy : Stand aside
Despite last week's rebound to 0.9320, the subsequent selloff after faltering below this level suggests correction from 0.8999 recent low has ended there and retest of this level is likely, however, break there is needed to signal recent decline has resumed and extend weakness to 0.8970 and possibly to 0.8950 but loss of near term downward momentum should prevent sharp fall below latter level, risk from there is seen for a strong rebound to take place later.
On the 4-hour chart, the move from 0.8066 is the wave 5 with i: 0.8860, ii: 0.8315, wave iii is an extended move with 1: 0.9223, 2: 0.8770, 3: 1.0183, iv: 0.9536 and wave v of 3 has ended at 1.1081 (it could also be the top of entire wave 5). In view of recent acceleration of decline, a sustained breach below support at 0.9672 would confirm wave 5 has ended at 1.1081 and bring major correction of medium term uptrend to 0.9000 and then 0.8900.
In view of this, would not chase this fall here and would be prudent to stand aside in the meantime. Above 0.9100-05 would bring recovery to 0.9150-55 but reckon yesterday's high of 0.9207 would limit upside and bring another decline later. Only break of 0.9285-90 would revive bullishness, then retest of 0.9320 would follow, once this resistance is penetrated, this would add credence to our view that wave v has ended at 0.8999, bring retracement of recent decline to 0.9345-50 and later towards 0.9390-00.
On the bigger picture, the major rise from 0.6007 is wave (B) and only wave iii of wave C has ended at 0.9407, followed by wave 4 at 0.8066 and wave 5 has either ended at 1.1081 or may extend to 1.1195/00 but reckon 1.1300 would hold.
IMOH, Clement I.
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