One thing I thought I'd mention since the EUR/USD does not appear to be declining impulsively and not giving a clear signal yet on whether a top is in or not is that the GBP/JPY is declining in 5 waves suggesting the one larger trend is down. Normally we look at the EUR/JPY to connect to the stock market and risk but I want something separate from the euro for indications.
The GBP/JPY (british pound/japanese yen) can be tied to risk and when it rises, risk and the stock market rise and when it falls, risk and the stock market falls. Well this has been in a downtrend for a while now and it appears to be declining in five waves which may signal risk aversion and fear is creeping back into the market overall.
Right now you can see on the 30min chart above that it appears to be in a 4th wave triangle. If correct, we should see a thrust to target at least the 142.00 area before a sizeable correction occurs. What's key to this outlook is the beginning of the 5 wave decline which is the 144.22 level. As long as the pair trades below that, it's bearish in the short term and could help us understand where the overall market is as far as "risk appettite".
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