In last night’s update, I wrote that “It is wise to abandon the bullish bias at this point. What I thought was a 4th wave is taking far too long. Although price has yet to slip below the parallel Elliott channel, it should soon. A reason to at least turn neutral at this point is the overwhelming agreement that the ‘bailout’ from Paulson and co. is bad for the US dollar. One headline of many appeared the day of the recent top (Sep. 22). Such uniform thinking is rarely correct. From a technical standpoint, the rally from 1.4150 is close to equal with the rally from 1.3877-1.4546.
Equality among waves is typical of corrective behavior. Price should remain below 1.4745 if indeed a larger EURUSD is underway.” The EURUSD immediately reversed and exceeded 1.4745. The dip to 1.46 may be the extent of the USD rally from the ‘headline extreme’. Holding above 1.46 keeps the trend up. The best count at this stage is a triple combination. The first two legs are 661 and 714 pips…traveling 661 pips in wave Z places the EURUSD at 1.5264. This is in the vicinity of the 61.8% correction of the decline from 1.6040. Confidence in directionality is low right now…as it usually is during a correction.
