Stocks are trading down sharply, after the US CPI data yesterday when numbers above expectations were enough for speculators to sell stocks and buy the USD on hawkish FED projections, with even a 75bp hike in view in the next meeting.
Finally, the EURUSD is breaking down, and ECB cannot stop the bears with their comments, we need real policy actions from the ECB for a change in trend. Pair broke below 1.05 level which was a key spot for a continuation down into a fifth wave. So as long as this price holds, trend is down, but keep in mind that drop is coming out of a triangle, so it’s final stages of a higher degree trend, therefore be aware of a reversal. Why? Because, firstly everyone just watches or will give up on the direction of the pair, when it’s in a chop in a triangle range, but then, after a breakdown, everyone wants to catch the move, most of them too late and action is overcrowded, thus the opposite may follow. Fifth wave projection is at 1.03 and 1.04.