[B]Commentary[/B]: The inability to hold above the 6/1 low at 1.3392 and the break under the trendline drawn off of the October 2006 and January 2007 lows indicates additional bearish potential. The next support level is the 100% extension of 1.3680-1.3392/1.3552 at 1.3264.
Former support at 1.3392 should be solid resistance now. The pair has stalled at the 100 day SMA, a break under here would be significant as the EURUSD has traded north of this moving average for all of 2007. Very short term, the EURUSD may be in a small 4th wave that will lead to a drop below 1.3319 before the a 3 wave correction higher occurs. We will be looking for this correction to align with the downtrend. This scenario is depicted on the chart above.
[B]Strategy[/B]: Waiting for a 3 wave setback in order to align with the downtrend.