The FX corner: a glance at EUR/USD

Let's examine the EUR/USD downtrend since Nov. 25 last year. We are looking at a possible 3-wave pattern which could be completed by last night's low at 1.3268. Confirmation of this would be the ability of the euro to break above March 2 low at 1.3435. Looking in more detail, this would also mean breaking through 50% Elliott wave 4 retracement in a supposed wave 5 of the move down from 1.3819 on March 17 (point IV in picture below). So one should establish a long position on a pullback after a high above 1.3435.

Failure to move higher should pave the way for fresh lows intead. And in this case, I would see 1.31 as an important target for now.