Euro Commodity Crosses In Corrective Declines


Commentary – Last week we wrote that “we favor a deeper correction because wave 5 of the 1.5491-1.7159 rally was extended, and extended 5ths are often fully retraced. This is just in front of the 61.8% of 1.5491-1.7159 at 1.6128. Potential support prior to that level is the 50% at 1.6325 (11/19 low is at 1.6316). (note, W-X--Y indicates that a larger complex correction is unfolding). An alternate count suggests that larger wave 2 is complete at 1.6476.” The deeper decline that we expected is underway now so look for support near 1.6130. Follow developments in the Elliott wave forum.
Strategy – Getting bullish near 1.6150
Commentary – Last week, we wrote that “a setback is due and support should be strong in the 1.4666/1.4824 zone. This is former congestion and is defended by the 50% of 1.1462-1.5198 at 1.4678.” Price made a low at 1.4670 this week before rallying back to 1.4958 but the rally to this level was in 3 waves. Expect a drop below 1.4670 next week and look for support near 1.4558.

Strategy – Flat
Commentary – It is still possible that a triangle is unfolding but 1.8510 must hold in order for the structure to remain intact. If 1.8510 gives way, then look for a retest of the 61.8% of 1.7030-2.0186 at 1.8242 and maybe a drop to the 78.6% at 1.7706 in order to complete a flat before the big bull run gets underway.
Strategy – Bullish, against 1.8510, target is above 2.1122 (July 2006 high)

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