There were 3 points intersecting near 1.5650.
• Wave c = wave a = 1.5640
• of the August to September sell off = 1.5674
• Wave (ii) = wave circle red ‘ii’ = 1.5650
Now that we have sold off a bit from today's high, the wave ( iii ) picture is still alive. Now, it becomes a test of support and if those support levels begin to break, it will build the case for the wave ( iii ) picture.
The next levels of support to watch is 1.5550 then 1.5450.
This wave ( iii ) has significant implications if it is true. Looking at 1.49 or 1.35 as target zones.
Here was a post illustrating our previous view from last week :
Equal waves are suggestive of corrective moves and the entire move is likely to be completely retraced. They are one of my favorite patterns because they eliminate some of the noise of the analysis.
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The 8/25 to 9/4 down move was the first 5 wave move of the same degree of trend and it was approximately 650 pips. Therefore, we likely see at least one more down move of similar magnitude or of a distance that is 1.618x 8/25-9/4. So another down move of 650 is still quite possible that targets 1.50.
Also, take the June 18- July 8 down move and apply a 1.618x extension to it places a target of 1.49.
Now, when using EW theory, I'll also factor in what other wave count possibilities that exist. There is another interpretation that is quite bullish where the bull leg could begin above 1.49. So now we are seeing multiple targets show up in the 1.49-1.50 area.
For the super bearish scenario, take a look at the 2014 down leg from July 2014 to March 2015. This is a 5 wave move that began a down trend. So it likely needs at least 1 more 5 wave down of similar degree of trend. Project the distance traveled from 2014-2015 and project it from the June 18 high and it takes you into the middle 1.30's (near 1.33). I mentioned 1.35 to run a more conservative target for the aggressive bearish count.