We saw a new record high at 1.5462 on Friday. However the euro was sold off heavily as a result to 1.5312 which is a first signal for a start of the long awaited correction of the up-move started from 1.4481 (7 February). With an eye on this possibility I entered short on Friday. My working count is presented on the chart and it suggests that the fall to 1.5312 is wave I and the subsequent recovery is wave ii. In fact wave ii could still not be over and one more rise to 1.5404 is still possible before its end. This is the reason to lower the stop loss of the current short position to 1.5372. I think that a rise above this level would bring re-test of 1.5404 where I will re-enter short in a case the current stop loss is taken. On the other side a fall below 1.5312 would signal that wave iii is under way so I will add to the short position below this level.

Trading strategy: 11:10 EST; 15:10 GMT

Short position from 1.5394, stop profit - 1.5372, target - open.

Add to the short position on break of 1.5312 (sell stop order at 1.5311), stop loss - 1.5372, target - open

Confidence level – high

This analysis has only informational and educational purpose and does not represent a proposal for buying or selling currency contracts.