Daily Forex Outlook: EUR/USD

EUR/USD has formed at least few years high last year at 1.6038 (15.07.2008). The subsequent sell-off was very sharp but turned out to be corrective in nature - flat correction. Wave A of it finished at 1.2549 (4 December 2008) and the following movement is wave B. My wave count for the said wave B is presented on the chart. I label it as a flat with currently developing wave c as a terminal impulse with extended fifth wave. This terminal impulse is still far from completing and I expect initial fall below 1.3738 (the most natural target is 1.3500) in wave iv. When wave iv is over, I would expect a sharp rise in wave v of c for 1.5500 (the minimum length for wave 5 in such a case is the length of the beginning of wave 1 to the end of wave 3). From a short term point of view I am currently short after yesterday’s fall below 1.4000 and I will look later for a level for a strategic long position once I see a fall below 1.3738

Trading strategy: 05:30 EST; 10:30 GMT
Short position from 1.3999, stop loss - 1.4205, target - open

Karoll Financial House