Which takes precedence the Fibonacci target or the wave count? That is always a difficult question and the answer will probably vary by analyst. Following the push to new highs of 1.0855 that we have labeled a B wave, we have an aggressive decline to spike the ideal 1.0525 downside swing target. Thus there is a window to clear the former 1.0595 low and down channel resistance to attempt a 38.2 percent upside correction of the third wave to the point of a possible 5 wave extension at 1.0630. As extensions are often doubly retraced that would allow another test of the 1.0510 low as a failed fifth wave and marry the wave count with the Fibonacci target. In fact there is even a chance for a full 38.20 downside target of the entire 98.60 to 1.0855 trend with a drop to 1.0475. However, we still suspect we are ending a corrective decline from the 1.0855 peak that should begin a base building process for a stronger attempt at the 1.1080 peak. Unfortunately only below the 1.0380 medium term pivot point would confirm an early major downside reversal.

By Don Haines,www.MarketVisionTV.com