A major multi-year low could be in place at .9055. The decline from the 2002 high at 1.6189 is in 7 waves and counts perfectly as a double zigzag, labeled W-X-Y. One reason that we propose the major low scenario is because the strength and form of the rally from .9055 is indicative of a major turn. The 13 day rate of change (not shown) from .9055 to 1.0248 was the highest that it had been in years. Momentum extremes such as this ‘announce’ major trend shifts when the move occurs from a significant high or low.
The latest bull leg (.9710-1.0324) is a wave 1 impulse within a 5 wave bull cycle (wave i of 1 is a diagonal). We previously treated the “drop to 1.0018 as wave 2” therefore thinking that wave 3 is underway now. But with price appearing as though it will break below 1.0018, a wave 2 low will probably come in near .9945/67 (61.8% of .9710-1.0324 and 100% extension of 1.0324-1.0018/1.0273).
