The inability from bulls to break above the 81.40-50 resistance is not a good sign. Another rejection in that area could mean that there is more downside corrective potential towards 80.30. This is shown in the first chart below where the entire correction of the upward move from 79 is not over yet.
The downward correction from 81.50 could have only completed wave A and B for now. So wave C down towards the 50% or 61.8% retracements is very possible. This wave scenario will be valid if prices break below the 80.50 lows. This low is important as from that level we can see 5 waves up. If these 5 waves up are retraced by only a fraction, then we could see an upward move to new highs.
Prices as shown in the chart above have moved upwards in an impulsive wave. The downward move looks corrective as there are overlapping price patterns. Prices are near the 50% retracement and could reach 61.8% to end the downward correction. Breaking below that level will increase the chances of the bearish scenario we started talking at the beginning of this analysis. So what to do? Bulls should think of long positions only if prices break above 81.15 and definately above 81.50. Until then we remain neutral.
