The 1h chart above shows that the move from A to B was in 3 waves, not 5. Therefore, it is just a correction of the larger downtrend. The decline that followed was clearly in 5-waves, and so I am looking to go short on a 3-wave correction. I am aiming for around 1.5540 because there are several confluent resistance levels in that region:
- 1.5537: Wave-iv high
- 1.5537: 38.2% fib of the decline from 1.5651-->1.5467
- 1.5540: Weekly pivot point
- 1.5552: Monthly pivot point
My stop is above the 50% fibo level.
Interestingly, retail traders increased long positions by 34% in over a 25 pip range. In other words, small price action convinced them to go long, which is bearish. Also, that horizontal line on the chart appears to be very good support. Since it is so obvious, price will probably break through to stop everyone out. Hopefully it works this time around!