Zooming in on the count since the low last Sunday night, we appear to be in the 5th wave of that rally as well.
The EUR/US$ threw a little head fake last Friday into Sunday night, but it does appear to have topped on Tuesday. Five waves up from the low of Jan 10 can be counted into Tuesday's high, and the action since then is clearly five waves down. The EUR topped at 1.3856, a little past the .618 retrace at 1.3776 but still in the vicinity. Interestingly Minute W5 (green) of the rally from Jan 10 is almost exactly half of Minute W1 (.0583 for Min W1 and .0292 for Min W5).
If this count is correct the top on Tuesday marks a significant intermediate term change of trend. It would mark the end of an Intermediate Wave "b" correction to a Major Wave "c" bear market that started at the high of Nov 4. We would thus be in Intermediate Wave "c" of that bear market.
First target for Major W "c" is the low of Major Wave "a" last June, which was EUR 1.1874. A 1.618 multiple of Intermediate Wave "a" subtracted from Tuesday's high lands at 1.1740, right in the vicinity of that Major Wave "a" low. So that's a reasonable starting expectation.
The AUD/US$ also appears to have put in a significant top at today's high.
If this count is correct, there are five waves up complete for the bull market that started last May and thus some serious selling ahead.
The action in these two currencies points to strength in the dollar. That strength was reflected in the DX which is showing a clear 5 wave pattern up from a low Tuesday night. If in fact there is a change in trend towards a stronger US$ it will provide bearish pressure to equities. This helps buttress the case for a top in the ES being nearby.
