Euro Technical Outlook

I wrote yesterday morning that “the complex correction count, in which wave Y is underway from 1.2884, is the more likely candidate at this point. Near term, the decline from 1.3722 was confirmed as corrective (3 waves) when 1.3667 was exceeded. Near term structure is bullish above 1.3583. Coming under there would signal a bearish opportunity.” The EURUSD reached 1.3838 (an Elliott Wave extension is at 1.3840) in European trading before coming back slightly. Looking at very short term structure, one more high (just above 1.3838) looks likely in order to complete 5 waves up from 1.3420. Since neither wave 1 or 3 of the impulse is extended (wave 3 is slightly longer than wave 1 though), wave 5 could extend as high as high as 1.4100 (where wave 5 would = 1.618 x wave 1). Either way, I am on the lookout for a top and reversal IF price rallies above 1.3838. A drop below 1.3658 would suggest that a top is already in place at which point a bearish bias would be warranted against the high.