Reviewing what we already know; there are 5 waves down from 1.6018 which confirm that an important top is in place. The rally from 1.5554 is in 3 waves which is corrective and additional evidence that the larger trend is now down.
The EURUSD has dropped below 1.5554, therefore wave 3 (or c) within the 5 (or 3) wave bear cycle from 1.6018 is probably underway. For wave 2 to end above 1.5694, the pair would have to trace out an expanded flat, which is more common in 4th waves and the internal structure of the decline from 1.5694 is impulsive. Ideally, price remains below 1.5610 but risk can be moved to 1.5694. View our EURUSD pre-Fed report, published yesterday.