EUR/USD - 1st wave of 5 complete!

Wave 1 of 5 is likely complete. We are now in corrective wave 2. Two primary options in consideration on the very short term count. Either an wave 2 expanded flat has completed or nearly completed with the move this morning to 1.3568, or the "a" leg completed this morning and should be followed by more corrective action in a "b" and "c" or some variety to complete wave 2. If the latter, we could see wave 2 move up to around the first fib level of 1.3624 where there should be some considerable resistance. This area represents the previous wave 4 at a lesser degree, a very common area for wave 2's to retrace.

The flat is a bit more probable that a more extended wave 2 IMO due to the internal wave structure of the move down to lows. It counts best as a series of 3 waves. 

Either way, the correction represents an opportunity to place shorts for a move below 1.3434.

Notice the purple trend channel lines. This mornings move up broke through the upper purple, and then came back to retest before heading up in what appears a 5 wave pattern.

Also notice the longer term red channel lines. If you remember, I drew these last week to represent the EURO bulls last line of defense. It appears that the market has respected this line as support in the short term. Wave 3 down should break cleanly through this on its way to a new low.

I was glad to see the rebound take place BEFORE a break below 1.3434. If it had taken place later, it would have left us with an impulsive wave down to new lows, which meets the minimum requirements to count the entire move down from 1.51+ as complete. As traders, we are now left with a clear short term impulsive wave down, not to new lows... and an opportunity to place short positions with probability on our side.

The analysis side of our work is now complete for the moment. Now we simply have to watch and wait.