We continue to look for signs to support the bearish outlook as we will soon discuss.
First off, I need to apologize for missing yesterday’s analysis. The software I use (MotiveWave) has been very unstable for the past couple of days, and now it seems to have gone completely offline. I downloaded another software package to publish this analysis, but it’s really difficult to migrate years of customization into another package.
That said, until only a few hours ago, our last analysis had been holding quite well. However, while the general count is still valid and remains my preferred count, it will have to prove itself by meeting our confirmation point either by the end of today or early next week. If it doesn’t, I’ll have to redo the analysis from scratch — hopefully on my old and trust MotiveWave.
Cable drifted lower in line with the bearish count before reversing gears in a corrective manner.
The bottom line remains that backing and filling should prove corrective, preparing the stage for further decline.
As expected the euro moved toward the downside, reached both of our targets, and now seems to be reversing 40 pips above our invalidation point.
The pattern now seems perfectly complete. And while triangles are very tricky and can continue their consolidation for what feels like an eternity, we have a line in the sand constituted by the triangle’s upper and lower boundaries.
Cable confirmed the bearish interpretation. The focus now is on lower and backing and filling should prove corrective, setting the stage for further decline.
As expected the euro moved toward the upside, passed our confirmation point, and is now well on its way toward reaching our first target.
Keep in mind: once price hits the upper invalidation point of the hourly count, we can immediately and safely set our sights on the targets of the daily count.
The euro managed to push a little higher, but just barely. The daily chart now shows a fairly bearish candlestick, and so the larger pattern of the triangle is still my preferred count.
I delayed the publication of this analysis as much as I could, hoping the triangle will show some signs of conclusion so that I could update the count with more ambitious targets, but it seems we’ll have to go through another day or two of this scathing consolidation.
The drift to lower lows leaves the short-term corrective bounce interpretation on thin ice. We still want to see a drop below the main hourly count’s invalidation point to gain confidence in the bearish case.
The euro managed to push prices upward enough to exceed the typical resistance of the current pattern, but not enough to break its invalidation point.
Like any sideways consolidation, this contracting triangle will come to an end, and it will be followed by a sudden and swift move in either direction. And even though I’m presenting both possibilities today, I must stress that the targets of neither count may be reached, as it’s quite possible that this 5-wave triangle is turning into a much more complex 9-wave triangle, which can squish prices into an even tighter sideways range.
Cable remains locked in a sideways consolidation and the bottom line remains that bounces should prove corrective, setting the stage for further decline.