EUR/USD broke higher and exceeded the daily .786 retracement at 1.3240, but don't forget that the day is not over yet. The 60-minute chart looks to have completed 5 waves up to the 1.3275 high and has since pulled back to consolidate around 1.3260. What I really like about this wave count is the Fibonacci relationship between waves 1 and 5. Wave 1 topped out at exactly 89 points (the 11th number in the Fib progression) on November 20, and wave 5, if my analysis is correct, has just completed after moving 144 points (12th number in the Fib progression) to the 1.3273 high. 89 multiplied by 1.618 equals 144. Who was it that said the markets are random? We have likely seen a short-term top that could bring profit taking over the next few sessions.

Zooming into the hourly we get further price relationships that point at a 1.3270 high, including parallel trend channel resistance. I am short small EUR/USD at around a 1.3260 average with stops above daily R3 at 1.3289. Back tonight with an update.

Todd Gordon is a Technical Currency Strategist and Fund Trader with GAIN Capital Group.

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