The rally from 13266 was in 3 waves and has now been completely retraced. As small as the advance was relative to the preceding 5 wave decline from the 2009 high, it does fit as a 2nd wave correction (ending in the prior 4th wave area). Near term, there are 5 waves down from 13420. It is possible that the decline completes wave c of a flat (of B) rather than the wave i of the next impulse. If that is the case, then the next rally would probably encounter 13500/20. That rally would probably prove terminal however. It is best to favor the downside.
Jamie Saettele publishes Daily Technicals every weekday morning, COT analysis (published Friday evenings), technical analysis of currency crosses on Monday, Wednesday, and Friday (Euro and Yen crosses), and intraday trading strategy as market action dictates at the DailyFX Forum. He is the author of Sentiment in the Forex Market. Follow his intraday market commentary and trades at DailyFX Forex Stream. Send requests to receive his reports via email to jsaettele@dailyfx.com.
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