The chart shows my working count for the movement started from 1.6038 (15.07.2008). I think it is corrective in nature and is developing as a flat correction. Wave A of it turned out to be a double corrective combination ended with a triangle. Wave B is currently developing. It has as a minimum requirement new high above 1.4718 (18.12.2008 high) but more natural target is 1.5500. From a shorter term point of view we are currently in wave c of B. I think it will turn out to be a terminal impulse (ending diagonal) with extended wave 5. If this is the case, we should see initial losses in wave 4 below 1.3738 (the end of wave 1) € the most likely downside target is 1.3500. When the wave 4 is completed, one should expect new sharp rise in wave 5 to 1.5500.
With an eye on the short term bearish picture I stay on the short position opened last week and once I see a fall below 1.3738, I will start to look for an entry level for a strategic long position
Trading strategy: 08:19 EST; 13:19 GMT
Short position from 1.4270, stop loss - 1.4345, target € 1.3500
This analysis has only informational and educational purpose and does not represent a proposal for buying or selling currency contracts.