FX Tech Lab: USD/TRY (Update 4) – Beware of A Pullback Amid Test of 2011 Highs...
FOREX.com | Dec 20, 2011 04:27AM ET
Last week I highlighted how USD/TRY formed a Bullish Engulfing candlestick, which signaled a potential further advance towards the Positive Reversal’s measured move objective near 1.9180/90. Moreover, we noted that such a move would surpass the prior wave-III high near 1.9095/00 from October and thus a potential new multi-decade high.
Sure enough, USD/TRY has continued to move higher, making a series of Bullish Engulfing candlesticks in the process, as risk aversion remained squarely in focus. However, the updated Elliott Wave count (see chart below) shows that a short-term correction may ensue amid this test of the 2011 highs. Currently, it appears USD/TRY is in wave-v (grey), of wave-3, of overall wave-V (black), and since the prior wave-iii (grey) has been surpassed, it meets the minimum criteria of this 5-wave advance – This suggests the present rally may stall . While a pullback could occur at any time, we believe it will likely push higher into 1.9180/90 positive reversal target before seeing a reversal. Additionally, such a correction would be generally viewed as another opportunity to establish our bullish bias heading into 2012 as long as 1.8000 remains intact.
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