Best reading of Elliott wave cycles suggests decline from 0.7914 ((X)) high is taking the form of a triple three structure. Triple three is an 11 swing structure labelled here as ((w))-((x))-((y))-((z)). Drop to 0.7748 completed wave ((w)), recovery to 0.7860 was wave ((x)), dip to 0.7696 was wave ((y)) and 2nd wave ((x)) is considered completed at 0.7740. We have already seen a new low below ((y)) but as far as 0.7740 high is in place we expect to see another push lower in the pair to complete the cycle. We don’t like buying the pair and favour the short side against 0.7740 pivot. Target for next leg lower is in the range of 0.7559 – 0.7517 or could even extend to 0.7500 area. If pivot at 0.7740 high gives up, that would suggest ((y)) ended at 0.7600 and we are still in 2nd wave ((x)) but pair would still remain bearish against 0.7860 and 0.7914 pivots. Once wave “W” is over, our preferred Elliott wave count calls for a bounce in the pair to correct the entire decline from 0.7914 high.
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