Commentary: We maintain that wave 4 within the 5 wave bull cycle from 1.3261 is underway now. Wave 2 (of the same degree) took 4 weeks to play out and this week is week 3 for wave 4. Therefore, we expect a significant bottom to form next week. We wrote yesterday that “it is possible that wave B of 4 is complete at 1.4770 and that wave C is underway towards 1.4500.” As it turns out, wave B was in place and the EURUSD is on its way towards where C would equal A at 1.4423. The 38.2% of larger 3 is at 1.4353. We expect at least a drop to 1.4423 by next week and possibly 1.4353. Near term resistance to add to the short trade is at 1.4620.
Strategy: Bearish, move risk to 1.4770 (from 1.4908), target 1 at 1.4430