Commentary: There are two counts that we are tracking closely. One treats the decline from 1.4281 as wave A on a larger correction.
The subsequent rally would be wave B and wave C would be underway now. Under this scenario, the decline is likely to extend to at least 1.3978 (100% extension of 1.4281-1.4015/1.4243). This count is favored due to the sentiment readings from the COT report which strongly suggests that the US Dollar is nearing a bottom. The alternate count treats the rally from 1.4015 as wave i of a new bull cycle with a smaller a-b-c correction unfolding now.
Strategy: Flat
Written by Jamie Saettele, Technical Currency Strategist for DailyFX.com
