EUR/USD - An alternative we can't forget

The break above 127.50 has questioned the strength of the USD. By breaking above 127.50 the big S/H/S top-formation is in danger of being cancelled. A close above 127.50 this week will do serious damage to the possible top-formation.

Therefore we should also consider the possibility, that the entire [A]-[B]-[C] correction from 160.38 is done. Wave [C] became a bit smaller than wave [A], but we can clearly count five waves down and the break above 127.50 means that wave C or 3 will rally towards the 130.77-131.26 as it extends. It will be the following decline that will determine if the rally since 118.75 was wave C or it's wave 3. If the next decline enters into the area of the first wave up from 118.75, then it has to be and A-B-C correction. If it doesn't and we will see one more rally to a new high, then we know we need to cover more upside, after a correction.

The daily chart below shows the decline in the possible wave [C] and the following rally in details.