After a sharp rally to the upper side, the impulsive wave (5) could not rise above 1.2092, instead the pair rebounded from this level and headed short. We expect this bearish rally that began later last week to be the unfolding of a corrective three wave cycle with the first impulsive wave (a) ended around 1.1830 and the last impulsive wave (c) ending around 1.1671. A rebound around 1.1671 is highly anticipated since the intraday stochastic is heading towards its oversold level of 20, and should rebound to give us a buy signal. While you’ll be looking to buy euro around 1.1671, check and confirm that the stochastic is below its oversold level of 20. This pair will have a similar price action during this intraday.
If you’re short already, remain but only up to 1.1671.