The structure right now is only 3 waves down, which is a correction. But you need a 3 wave move to start a 5 wave move, so let's wait and see how this decline unfolds. And you'll see I put up a quick five wave count leading into the decline to show that a top at some degree is in. This could quite possibly the be the final impulse wave of the entire move up the past several months.
I believe there is at least a short term top in place simply with all the other evidence suggesting this market is bloated and overbought at the moment. Even though I'm almost guessing here, the risk/reward is solid since I can put a stop above the high on the week and expect a decline to the area of previous support at 1340. So I'm not going to jump and call a top to Primary ((2)), or suggest a major depression is picking up speed. No, I'm just saying that odds favor the market having put in at least a short term top this week and the risk/reward favors the bears here. Keep it simple, keep it short term.....for now.
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The euro, on the other hand, has been kind to bearish wavers since it has more or less followed my wave count. Wave (c) of ((ii)) ended up deeper than I expected so I had to adjust waves (iii), (iv) and (v) to give it a better look. But it all fits well. This count suggests the euro's next move should be down big.
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And drilling down even further for the euro we see one of my favorite trading patterns; a head and shoulders top. When you combine this formation with the wave count above it, you have a very bearish and tradeable outlook for the euro moving forward. I'm pretty heavily short the euro right now myself.
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PLEASE NOTE: THIS IS JUST AN ANALYSIS BLOG AND IN NO WAY GUARANTEES OR IMPLIES ANY PROFIT OR GAIN. THE DATA HERE IS MERELY AN EXPRESSED OPINION. TRADE AT YOUR OWN RISK.