The drop from 1.0823 is either a completed A-B-C decline, is wave A of a triangle, or wave C is still underway from near 1.0140. 2 of those counts call for a push through 1.0140 but even so, weakness is expected near term in order to correct the advance from .8881. Support should be strong near .9340. This is the 61.8% of .8881-1.0080.
Let’s focus on the bigger picture. The decline from 1.0546 (2004 top) is in 3 waves. 3 waves indicate a correction, which should be fully retraced. Near term, trendline support is at .9536. A drop below there would likely lead to a test of the 5/14 low at .9293.
Longer term, the pair is headed for a test and likely a break of the 2000 high of 1.3506. A consolidation/pullback should be underway now that could potentially reach the May low at 1.2141. We’ll reiterate what we’ve mentioned in recent weeks though; shorting is dangerous because there is the possibility that the advance extends from current levels given that the larger degree trend is up.
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