A diagonal can be counted as complete from 8800 and a break of 9050 would inspire confidence in the downside. The diagonal from 8800 may complete wave C of an A-B-C correction from just below 8600. If this count is correct, then the entire advance (from 8600) will be retraced over the next several weeks. Look for resistance at 9265. It is worth noting that 21 day ATR is at its lowest point since July 2008. As a barometer of risk aversion, the complacency that is indicated by the low ATR level warns of a top and reversal.
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.
