The EUR/USD has pulled back from overbought conditions, highlighting a clear 5-wave structure off the September low. It is too early to determine whether a large zig-zag correction has been completed or if this is merely the termination of the first wave of a powerful 3rd wave extension. Either way, the anticipated correction is in play and while the EUR/USD consolidates above previous resistance at 1.3157, an extension to 1.35 is favored. This key level is not only the 50% retracement of the November to June decline, but its also a Fibonacci expansion of the June to August advance. If the current pullback exceeds the normal counter-trend length of 3-4 days, then Wednesday's high could represent an intermediate top and the base of the previous 4th wave at 1.3020 could be tested. Keep in mind that the first week of October marks the 4-month anniversary of the 2010 low and could represent significant resistance in time. Finally, since short-term technical studies are not oversold at the moment, I am looking for further weakness to buy into.
STRATEGY: BUY EUR/USD at 1.3181, risking 1.3126, targeting 1.3500
