EURUSD Enters Support Zone - 1.0982 Key Level

The break above 1.1087 on Feb 3 eliminated the bearish impulse and left us with higher probability patterns of:

*A 5 wave move higher beginning Dec 2015 that likely overcomes 1.1720 (bullish)
*A bearish diagonal such that last week's 1.1376 high was wave 2 of the diagonal (near term bearish to below 1.0517)

Though prices have sold off 200+ pips from last week, we're still leaning towards the bullish wave count. Why?

First, FXCMSSI has been ranging between -1.4 and -2.0 We saw -2.0 at last week's highs. The current reading is -1.45 (catch trader positioning in real time here). This indicates traders were not believing this bullish run. We know from past experiences that the majority of traders tend to be wrong so this lack of belief in the up trend is a bullish undertone.

Secondly, though prices rejected swiftly at last week's purple trend line, this sell off is typical and within normal bounds based on the wave count depicted on the chart. Said another way, if the bulls are going to take over, 1.1000 - 1.1135 is the price zone where that is likely to take place. The divergence on RSI is indicating slowing momentum to the downside. Below 1.0982, then we'll need to reconsider the higher probability patterns.

So lack of shift to bullish positioning and wave positioning has me leaning towards the bull camp with a good risk to reward ratio opportunity approaching. (1.1122 and 1.1087 and 1.1011 are areas of interest)

Good luck traders!