Yesterday the euro invalidated our main count by moving towards the downside and reaching the 1.1214 price level. And even though it didn’t break the invalidation point by a significant margin, this overlap – along with the extended nature of this downwards movement – strongly suggest a change in trend.
The coming 2-3 days will be important for determining the new direction of the euro. If price moves upwards in a corrective, slow and overlapping fashion, this will increase our confidence that the trend has turned towards the downside. At any rate, and unless you have a solid system of risk management, we think it would be wiser not to engage the market today, and instead to wait for this correction to be complete before riding the third wave downwards.
We’re updating our counts to reflect the most recent price action and to present tighter targets and invalidation points.