Euro Technical Outlook

Finally, a top appear to be in place. Remember, we had treated the advance from 1.5342 as an ending diagonal and suggested yesterday that the top may be in at 1.6018. Today’s decline obviously reinforces that view. We’ll focus on the very short term pattern this morning for timing purposes.

With respect to the count shown above, 1.5870 is a 3rd wave that will extend lower, and probably quickly. Expect a rally to end in the 1.5775/1.5815 as wave ii of 3. One can argue that wave 2 is inordinately small, but this is a MAJOR turn and markets typically do not allow many people in at major turns. In other words, many will wait for a larger correction that never happens. Resistance is strong in the 1.5775/1.5815 zone.