Today was quite uneventful for the euro, which was to be expected after such a strong movement, and which is also in agreement with our last analysis. Neither of our targets has been reached yet (although price came 20 pips short of the first target), so our expectations for the euro remain as they were yesterday.
We’re updating our counts to reflect the most recent price action and to present tighter targets and invalidation points.
Hourly Main Count
– Invalidation Point: 1.3810
– Confirmation Point: –
– Upwards Target : 1.3698 – 1.3748
– Wave number: Micro C
– Wave structure: Motive
– Wave pattern: Impulse or Ending Diagonal
Elliott Wave chart analysis for the EURUSD for 19th December, 2013. Please click on the charts below to enlarge.
Main Daily Wave Count
The bigger picture sees the euro within primary wave B to the upside, and within that in intermediate wave (C), and within that in minor wave 3.
Within minor wave 3, minute waves i unfolded as an impulse labeled minuette waves (i) through (v), and minute wave ii is unfolding as a flat correction labeled minuette waves (a), (b) and (c).
Minuette wave (a) unfolded as a zigzag labeled subminuette waves a, b and c.
Minuette wave (b) unfolded as a double zigzag labeled subminuette waves w, x and y. It has retraced over 96% of minuette wave (a), fulfilling the requirement of a flat correction.
This count expects that minuette wave (b) is complete and that the euro is now continuing its downwards movement in minuette wave (c) to complete minute wave ii. This will be initially confirmed by movement below 1.3523, with final confirmation below 1.3398.
The MACD indicator is showing a difference between price and momentum, where price has made an nearly equal high whereas momentum failed to come close to its previous high. There’s also a momentum crossover, which strongly augments this count.
In terms of candlestick patterns, we had a very strong “bearish engulfing” pattern, which also supports this count.
While there’s a very small possibility that minuette wave (b) is unfolding as a triple combination and that the current downwards movement is part of its second wave X, this is highly unlikely.
At 1.3293 minute wave ii would retrace 50% of minute wave i, then at 1.3165 it would retrace 61.8% of its length.
This wave count is invalidated by movement below 1.2754 as minute wave ii may not move beyond the start of minute wave i. And once the euro reaches our final confirmation point, this count would also be invalidated by movement above 1.3810 as within minuette wave (c) no wave may move above the start of the first wave.
Main Hourly Wave Count
This count sees that minuette wave (b) is now complete, with its final micro wave C of subminuette wave y having subdivided into 5 complete waves labeled submicro waves (1) through (5).
After that and within minuette wave (c), it’s likely that the euro completed subminuette wave i and is now moving sideways to upwards in subminuette wave ii.
Subminuette wave ii is unfolding as an expanded flat labeled micro waves A, B and C.
Micro wave A formed a zigzag labeled submicro waves (A), (B) and (C).
Micro wave B formed a zigzag labeled submicro waves (A), (B) and (C), which retraced a little over 138.2% of micro wave A.
Submicro wave (A) unfolded as a leading diagonal labeled miniscule waves 1 through 5.
Submicro wave (B) formed a zigzag labeled miniscule waves A, B and C, which retraced 38.2% of submicro wave (A).
Submicro wave (C) formed an impulse and reached almost 100% the length of submicro wave (A).
This count expects that micro wave B is complete and that the euro is about to resume moving upwards in micro wave C to complete subminuette wave ii.
It’s highly unlikely that subminuette wave ii is complete, since not only was the 3-wave upwards movement too short for a second wave correction, but it was even shorter in duration than the impulse that preceded it. Both points strongly suggest that there’s more to this correction.
The MACD indicator is showing conflicting signs. On one hand, there’s a clear divergence between price and momentum, where price has made a lower low whereas momentum is clearly rising, which supports our count. On the other hand, it looks like a bearish momentum crossover is about to take place. However, if the signal line bounces off, this will strongly augment this count as well.
Candlestick analysis reveals no significant patterns at this point, so it neither supports nor contradicts this count.
At 1.3698 micro wave C would reach 161.8% the length of micro wave A, then at 1.3748 subminuette wave ii would retrace 61.8% of subminuette wave i. Keep in mind that, if micro wave B pushes lower still, then these target will need to be adjusted accordingly.
This wave count is invalidated by movement above 1.3810 as subminuette wave ii may not move beyond the start of subminuette wave i.