Market technical overview:
The market has made a low for the wave (a) of the lesser degree at the level of $3,500 and now is slowly developing the wave (b) of the corrective structure. The target for the wave (b) should not exceed the level of $3,676, which is a technical resistance for the price. When wave (b) is completed, there is another wave down left, wave (c) of the overall correction. This is the scenario for the simple (a) (b) (c) corrective structure only but it is worth to notice it might develop into more complex and time consuming corrective pattern.
The alternative Elliott wave count indicates a possible sooner termination of the wave 2 purple at the level of $3,500. Any breakout above the level of $3,676 would invalidate the main scenario and the price would be developing wave 3 purple towards the level of $3,850.
The bulls will have to break out above the resistance mode established between the 38% Fibo at $3,682 and local technical resistance at the level of $3,640. This zone must be clearly violated in order for bulls to move higher towards other Fibonacci retracements are reached at $3,757 and $3,832.
There is still a chance for an impulsive wave progression to develop to the upside, so long positions should be in play as long as the level of $3,438 is clearly broken. Targets for bulls are seen at the levels of $3,682, $3,757 and $3,832. Violation of the level of $3,438 invalidates the bullish impulsive scenario and then short orders should be in play with targets at the level of $3,223.
The material has been provided by InstaForex Company – www.instaforex.com