Prices have fallen sharply this morning. Whilst there is a chance we have begun the next major move down it is also possible that the recent decline is the B wave of a flat correction of the whole move down since the June 6th highs. If this were true then prices should reverse soon and begin wave C back up, possibly as far as the 1.5590 highs, which were made by A on the 26th.

   Another possible alternative is that the drop today is a 5th wave of the move down from the 6th June. This wave could reach to as low as 1.5280 before encountering a cluster of Fibonacci support and price objectives. It would be the final wave of a rare broadening ending diagonal formation which once complete would reverse steeply and probably rally back up to near the level of the 6th June highs.

Analysis prepared by:

Joaquin Monfort
Forex4you analyst