The speed and scale of Euro’s downmove from near 1.4700 has caught some traders off guard. Readers of these comments were at least forewarned of an imminent correction (although we were expecting it from 1.4730). Anyone who was trading technically would have spotted the development of a head and shoulders formation from a mile away, and made suitable adjustments to his wave count and downside targets. Not only did the Euro come off to the prior 4th wave level as shown in the chart, the distance it moved from the right shoulder was also 2.618 times the first downmove from the “Head” of the ‘head and shoulders pattern’ to the neckline. Clearly, if one had a proper understanding of the Wave Principle, there were low risk trading opportunities along the way.
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