It appears that the euro is currently in submicro wave 5 of micro wave 1 of subminuette wave 3 of minuette wave 1 of minute wave 5 down. Minute wave 5 should eventually take the euro below its July 14 low.
There is one danger, however, that we must be aware of: the euro has been in a trading range (the shaded box) for nearly three weeks now. There was a small push up from the July 14 low before we entered this trading range. In traditional technical analysis, prices are typically thought to break out of a trading range in the same direction as the trend that preceded the trading range, which would be up in this case. I personally put a lot more weight on Elliott wave analysis because, in my experience, it is usually much more reliable. But we must remain aware of the fact that as long as prices are in this trading range, traditional technical analysis implies that it is more probable prices will break out from the top of the range and continue trending higher.
Fortunately, the top of the trading range corresponds to the minute wave 4 extreme. So if prices rise above the top of the range, we also know that this wave count is wrong. As a result, the 1.0294 level is a good location for stop loss placement.
