This week we have two likely opposite scenarios in this pair.
The image presented below points towards the end of the downwards blood bath and resumption of the bullish trend. According to this assessment it seems that the move ending at May 09, 2011 (low -1.4255) was most likely the end of the 4th wave of this ongoing C or 3rd wave up. This downward 4th wave compliments the typical nature of 4th waves, such as ending very close to the previous iv wave of the 3rd wave, breaching the lower channel line (marked by joining the highs of wave 1 and wave 3 and then placing on wave 2), ending around 0.382 of wave 3 and taking almost the same number of days to transpire as wave 2 did i.e around 8 days.
Going down to the hourly chart presented below , it seems that this 4th was basically an expanded flat, which clearly divides in 3-3-5. With a subdividing in a zigzag ending at May 03, 2011, b again dividing in a zigzag ending at May 04,2011, it seems that the wave C has already ended or is very close to its termination. For now, we favor the view that the wave C has already ended and the uptrend has resumed, since we see clear 5 waves division for this C. The upward move for now seems to have made the i of the 1st wave up or the 3rd wave has already started ( The construction of this ongoing move will decide, which wave we are currently in) and is likely to continue for the upcoming weeks, taking price to new highs. However, this daily wave count is invalidated if we see the price entering in the domain of 1st wave at 1.3860 (High – Feb 02,2011). For now, this is as our first preferred scenario ,we favor going long on any potential pullbacks with stops no further than Feb 02,2011 high of 1.3860.
The alternative scenario, however presents an entirely different situation, likely to be possible in the upcoming weeks. According to this count, it seems that Eur/usd has completed the zigzag up to be marked as B, starting from June 07,2010(Low – 1.1878). The subdivision of this B wave are presented in the chart below. With wave a ending at November 04,2010 (high - 1.4281) , b ending in the form of zigzag at January 10,2011 (Low – 1.2875) , c ending at the recent highs made on May 04,2011 (high – 1.4938) , market is now moving lower to form the last leg to be marked as C wave. This wave count is invalidated with the movement above 1.4938.