The chart shows my working count. It suggests that the last two days fall is wave 5 which is already over today at 101.38 and a very strong up-move has started. This idea is supported by the fact that we saw today a fall below the 101.66 low (January 2005) which was not followed by an acceleration of the sell-off but by a sharp rebound. The 101.38 – 103.23 movement is wave 1 of the forthcoming strong up-move upon me and we are currently in wave 2 of it. That’s why I will try to enter long on 38.2 % retracement with a stop loss below 61.8 % retracement of the today’s rise. Only a sharp fall below 101.38 would change the situation from very bullish to very bearish.

Trading strategy: 11:23 EST; 16:23 GMT

The short position from 103.50 was closed at 102.95 with profit 55 pips.

Buy on dips to 102.60, stop loss – 102.00, target - open

Confidence level – medium

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