The break below the important support at 1.6670 was unexpected and has forced us to shift our long-term count. This new count still favors a bullish outlook, but sees a very complex corrective structure in the wave ii. From the peak of the wave i at 1.7099 in early February, a double corrective combination has been seen. First, a flat correction as the wave W and then a expanded flat as the wave Y to complete the wave ii. Either the wave ii is complete or very close to completing near after a final spike to just below 1.6653.

In the short-term, a break above the minor resistance at 1.6786 and, more importantly, a break above 1.6903 will confirm that the wave ii has completed and a new impulsive rally in the wave iii is developing above 1.7300.

R3: 1.6903

R2: 1.6828

R1: 1.6786

Pivot: 1.6710

S1: 1.6653

S2: 1.6642

S3: 1.6607

Trading recommendation:

Our stop at 1.6665 was triggered for a loss of 150 pips. We will be looking for a new buying opportunity, but waiting for a break above 1.6786.