With the break below short term important support at 124.54 we should now see downside pressure building for a new test of 122.89 on the way down to the first target at 121.26, which marks the 23.6% corrective target for wave 3. However, I think that a continuation down to the more normal correction target at 117.28, which marks the 38.2% correction target of wave 3. would be more likely. Short term I expect that the former support at 124.54, which now has turned into resistance will protect the upside for the next decline towards 122.89. It is also worth noticing, that we have broken below the channel, which has described the entire rally since 105.97.
Has a new uptrend begun or are we still locked in the complex correction from 1.6359? Both possibilities are still open. Yes we did break above 1.5978, but only slightly and not enough to confirm that this move up from 1.5640 is a new uptrend. That said, I'm more in favor of a new uptrend than not and if this is the case, we should see support at 1.5838 protect the downside for the next rally higher through 1.5927 and more importantly 1.5947, which will confirm a new test of 1.6024 on the way towards 1.6134 and higher. However, a break below 1.5838 will favor the scenario, where we still are locked in the complex correction since the 1.6359 high and call for a new decline towards 1.5640 and maybe even lower.
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