Euro at Critical Juncture

[B]Commentary[/B]: The EURUSD is at an important juncture right now. The pair bounced off of the 100% extension of 1.3552-1.3392/1.3552 at 1.3264 and yesterday?s candle was a hammer. Since the decline from 1.3680-1.3392 is equal to the 1.3552-1.3261 decline, then there is the possibility that an A-B-C correction is complete at 1.3261 and that price is headed to new highs.

However, the sentiment backdrop favors a much more significant top at 1.3680 as do other technical measures, such as the drop below the 100 day SMA and the break of the support line drawn off of the October 2006 and January 2007 lows. 1.3373 is short term resistance. As long as price remains below 1.3552, our bias is bearish but we are not taking action until we see a clear 3 wave setback.

[B]Strategy[/B]: None