As expected the euro first effected a modest downward correction, before it’s begun to resume its larger corrective advance.
As expected the euro moved toward the upside and is now 5 pips away from our first target. And although it took an extra day and a 14-pip dip below support, our main count is now back in alignment with its expectations.
It’s a bit too early in the development of this upward correction for me to place definitive labels or provide short-term targets, so today I’ll have to leave out the usual level of detail and keep to the mid-term targets.
Even though GBPUSD inched down, reaching and exceeding the cited target level, the drop below the main hourly count’s invalidation point negated that scenario.
It is early to tell with confidence whether a bottom has been registered. We would want to see a five-wave advance above the main hourly count’s confirmation point to suggest that a significant bottom is in place.
On the downside, a print below the alternate count’s confirmation point (the same level where the main hourly count’s invalidation point is) to imply that lower lows remain in store.
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Today saw a very modest advance followed by an exactly equal decline, bringing the euro right back to where it had started and keeping the main count almost exactly as it was.
Since our last long-term update in October 2017, the EUR/USD market has been moving reliably and precisely as expected.
This new long-term update walks through the recent developments and updates the expected targets of the new movement.
Weekly Main Count
– Invalidation Point: 1.2555
– Confirmation Point: –
– Downwards Target: 0.9024
– Wave number: Primary C
– Wave structure: Motive
– Wave pattern: Impulse
Please click on the charts below to enlarge.
Main Monthly Wave Count
The bigger picture sees that the euro is moving generally toward the downside in a combination labeled teal waves w, x and y.
Teal wave w formed a flat labeled maroon waves A, B and C.
Teal wave x formed a running flat labeled maroon waves A, B and C. It retraced exactly 50% of teal wave w.
Teal wave y is now forming a zigzag labeled maroon waves A, B and C.
Maroon wave A formed a strong impulse of over 3500 pips. It ended in March 2015.
Maroon wave B formed an expanded flat labeled black waves A, B and C. It retraced almost exactly 61.8% of maroon wave A.
Maroon wave C is forming an impulse labeled black waves (1) through (v).
This wave count expects the euro to continue moving toward the downside in maroon wave C.
At 0.9024 maroon wave C would reach 100% the length of maroon wave A.
This wave count would be invalidated by movement above 1.2555 as black wave (2) may not move beyond the start of black wave (1).
As expected the euro moved toward the downside, reached both of our targets, and exceeded the second target only by 3 pips.
The impulsive decline which began at 1.1411 now appears complete, and there’s a possible divergence in momentum, so I’m inclined to think that a corrective rally may be due. However, this remains speculative until there’s some evidence of a turn in events.
After a modest rallying attempt that barely managed to enter the resistance range we specified yesterday, the euro declined and retraced 85% of that advance, ending the day almost back where it had started.
I’m still not impressed by the rather ambiguous internal structure of all the price moves over the past week. But so long as they don’t break any rules, our main count is still the most fitting interpretation.
Cable unfolded toward the downside as anticipated and both cited targets were reached and exceeded. We should keep in mind that the main hourly count suggests that downside price action should be limited and that the larger degree uptrend is just around the corner. Meanwhile, we will allow for lower as long as the main hourly invalidation point holds.
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As expected the euro moved toward the downside, reached our first and second targets, then exceeded the second target by 8 pips so far. The third target is yet to be reached.
My concern, however, is that the subdivisions of this decline — and of the entire move since June 25th — on the hourly chart are not as clear-cut as I usually prefer them to be. Granted, this does happen occasionally at times of low liquidity or high volatility, but I still would like to see at least one unambiguous impulse within this decline soon.
For the second day in a row, the euro continued moving strictly sideways, although price seems to have established a slight upward bias.
And while there still isn’t enough price data to definitively label the recent subdivisions, I’m going to present a tentative attempt at a possible count.