Commentary: We wrote yesterday that “the EURUSD continues to rally and is approaching the 1.3900 figure. Measured resistance is at 1.3910 (100% extension of 1.3360-1.3719/1.3551). There is potential for a rally to the 161.8% at 1.4132 as well, but likely next week. See our special technical report on the EURUSD from Friday at EURUSD 1.40 for more analysis.”
Near term, the 5 wave rally from 1.3778 may have completed wave 3 within the 5 wave bull cycle from 1.3360. If this is the case, then we expect a wave 4 correction to end near 1.3784 (38.2% of 1.3551-1.3928 and former congestion) before wave 5 presses against 1.4000. Again, there is no change to the outlook for higher prices as the trend remains up.
Strategy: Exit longs at market