Commentary: Yesterday, we wrote that “the appearance of 5 waves up from 1.4125 along with this morning’s decline suggest that a top may be in place at 1.4503. 1.4500 is an important psychological level. At the very least, a return to short term support at 1.4374 is expected, but this is likely a more significant top that will see a return to 1.4125 (4th wave of 2 larger degrees).”
The EURUSD fell in what looks like a small 5 waves but the pair has bounced back. We are viewing the decline and bounce as waves a and b in a larger a-b-c correction. We expect the next move to be down in wave c towards 1.4374 (but again…a deeper decline is possible).
Strategy: Flat