The current wave count suggests that the XAO will soon break thru support and head further south to lower levels.In the short term, there are a couple of scenarios that could play out depending on the subdivisions that unfold for wave (iii) down.
Either a small wave 'iv' upwards needs to unfold now or a further drop needs to occur for more of an aggressive wave (iii) down.
There is solid support at 3500-3470 where a bounce into wave 'b' circle upwards could occur, thus marking 5 waves down complete. At 3470, this is 61.8% retracement of the previous leg upwards and offers a suitable target for a bounce.
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