Wave 5 in jeopardy. Trendline broken to the upside...

A full post later this morning, but I just wanted to discuss the price action overnight and this morning in the EUR/USD (and as correlated as an inverse, the dollar index). A few minutes ago, right after the open of the NYSE, we had a break in the upper trendline that has governed price action since March 17th. This happened after what was can arguably be counted a five wave move to the upside followed by a 3 wave correction. It is possible that wave 5 is over and that we are in the largest correction (wave 2) we have seen since the resumption of the down trend last November. It is also possible that this is a false break, and just part of wave 4 of 5. We are still near fib. 38% retracement levels which is common for a wave 4.

I am not ready to throw the towel in on the downtrend, because it still only looks to be in 3 waves since March 17th, however it is time to exercise extreme caution, because the market might be telling us that it is time for a breather in the downtrend for awhile.

It is the end of the week, and some decent gains for the EUR/USD bears and dollar bulls. We may head into the weekend near current levels as profits get taken off the table.