Tuesday, May 25, 2010

EUR/USD... Bottoms up!

The correction since the May 19th low counts clearly corrective as an ABC (or WXY if you prefer). The decline that has follow is so far only in 3 waves and has not yet hit new lows. Primary count I am following has us hitting a new low in a 5th wave before another change at a longer term correction. However, because the move down is so far only in 3 waves, an alternate count of a potential flat correction as a possibility which would have us moving higher is still on the table. A move below May 19th lows would eliminate this count, whil a move above 1.2340 would render the more bearish count highly improbable.

Keep in mind though, that even if the more short term bullish flat correction interpretation is correct, we eventually will find new lows. A move higher above last weeks high of 1.2671 in 5 waves, without hitting new lows under 1.214 would be yet another opportunity for the bears.

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