Since that harsh open (wave III) we made a new low and have been stuck in a triangle since. I hate trading triangles because there are a lot of false signals and they can take many different forms. This one actually looks like an ending diagonal, because there is a lot of overlap but still lower lows and lower highs. I'm expecting one more lower high and one more lower low for this move, probably happening this afternoon. I'm tired of playing the long side, so I'm looking for the short entry.
The carry traders are in THE HOUSE OF PAIN (/Cramer) this morning. EUR/JPY is down 2.74 (2.3%) as I write.
If that is a Wave IV on the EUR/USD, it's crossed into Wave I territory. It could be an expanding wedge. They are rare but do exist, and are extreme signs of exhaustion. It's more likely that we topped and I'll be watching it closely to find a dollar index long entry.
