The advance to higher highs above the main hourly count’s confirmation point is in line with the idea that the countertrend bounce we have been tracking is nearing an end. We will continue to look for higher highs as long as Cable remains above the main hourly count’s invalidation point.
As expected the euro moved toward the upside, and it has come very close to reaching our first target.
From the looks of it, this correction probably isn’t turning out to be a zigzag. And given its position, it can’t be a triangle, which leaves the possibilities of its being either a flat or a combination. And since flats and combinations are virtually indistinguishable until their very last phase, I’m refraining from placing labels on the recent movement until things clear up a bit, especially since we don’t them to calculate our targets.
Since the low of February 12 on the hourly chart, and despite the fact that the euro scored two new lows, there are a few observations that cast doubt on the sustainability of that decline:
1) None of the news low managed to exceed its preceding low by anymore than 10-15 pips,
2) Each downward swing (and each following upward swing) was smaller than the one before it,
3) Each decline seems to be supported by decreasing momentum, and
4) The entire structure since the first day of 2019 can very reasonably be seen to form a converging diagonal.
Once again, our dear friend and member Mohammed presents a virtually identical conclusion, using his own harmonic pattern analysis — which certainly adds more weight behind this count.
GBPUSD continued to score lower lows, reaching and exceeding the cited target before reversing gears, opening the door for the idea that an interim bottom has been registered.
Today’s main hourly count suggests that the last leg of a countertrend bounce has started, while today’s alternate hourly count, consider the possibility that the larger degree downtrend is in full throttle.
Have a great weekend!
The euro pushed a bit upwards as expected, but then it stalled in a converging sideways range well before reaching our first target.
For the third time this week, I find myself having to adopt an irregular count due to price’s forming an irregular pattern. I’ve noticed a small discrepancy in price between my current data provider and another source.
I mention this because the pattern I’m adopting today looks wrong on my chart, but it tracks correctly on the data of that other provider. Just thought I’d give you a heads-up about this.
Cable traded on up, confirming the alternate count before diving to lower lows.
The nature of the decline from yesterday’s high appears corrective in nature, opening the door for the idea that the countertrend advance has yet to peak.
A post below the main hourly count’s confirmation point will imply that lower lows remain in store for the second leg of the corrective bounce.
On the other hand, a rally through the alternate hourly count’s confirmation point would suggest that the final leg of that bounce has started.
The euro moved quite strongly (relative to the preceding rally, at least) toward the downside, dipping below the recently established support at 1.1257.
While this decline looks very impulsive, the equally impulsive-looking advance that came right before it forces me to consider both of them as parts of a larger correction. And even though I have to admit I’m not very fond of this count, it seems to me the most reasonable view at this point.
As expected the euro moved toward the upside and has come very close to reaching our first target.
We continue to look for evidence to support that the corrective advance is behind us and that the larger degree downtrend has resumed. We still want to see further impulsive decline to gain confidence in that bearish outlook in the mid-term. Near-term, it is arguable whether a smaller degree five-wave sequence is complete.
A post below the main hourly count’s confirmation point will imply that lower lows remain in store.
On the other hand, a rally through the alternate hourly count’s confirmation point would suggest that a smaller degree correction has commenced.
Yesterday we posted two alternatives for how the euro would likely move, and the market chose the second one. Price moved downwards toward its bearish targets, reached the second target at 1.1270, and exceeded it by 13 pips.
The euro has now been in a consistent downtrend for 9 days. It has reached all of its typical and even ambitious targets. It’s facing a moderate level of support on the daily chart. It appears to have completed its wave structure on the hourly chart on multiple degrees. Even our friend and member, Mohammed, has contributed his own harmonic wave analysis of the 4-hour chart, and it seems to agree that this round of decline is done.