Commentary: We wrote yesterday that “the rally from 1.3360 appears to be in 5 waves and may very well be complete or close to complete. A correction of this rally is expected to unfold soon and bring price back to at least 1.3828. However, from a trading perspective, there is no reason to fade this move until we see a clear decline in 5 waves followed by a corrective setback.”
The decline from 1.4130 to 1.4061 is in 5 waves and is most likely wave a of an a-b-c correction. The bounce looks like an expanded flat as wave b. A very short term bearish bias is warranted against 1.4130. Support may be strong at 1.4040 (former 4th wave). As mentioned, a deeper correction would possibly test 1.3828. The structure of the decline will alert us to the bearish potential.
Strategy: Very short term idea?.bearish now, against 1.4130, targets at 1.4040 and 1.4000