The breakdown of the ending diagonal unfolded nicely, forming a 464 pip, 5-wave down move. This is a significant move, and I think it is the start of a downtrend. Retail traders have finally switched to net long, so sentiment is confirming this new trend as well.
I believe the correction to this downmove is still ongoing. It looks like it'll form as an irregular flat, which should bring the price above the Wave-a top. MACD and RSI divergence indicate a temporary bottom, as does the Monthly pivot point which lies at 1.5556. Also, price often hits the Weekly pivot point (1.5721) before resuming the main trend.
I am looking to short around 1.5720 due to overlapping resistance in this area:
- 1.5730: 1.382*Wave-a
- 1.5722: 38.2% fibo
- 1.5721: Weekly pivot point
- 1.5706: Wave4 high
My stop will be above the 50% fibo.