As expected the euro ended the day with an upwards movement which had reached our first target and came 25 pips short of the second target.
We’re updating our counts to reflect the most recent price action and to present tighter targets and invalidation points. And as usual we’ll use each count’s invalidation point as confirmation of the other count.
Also please note that, from now on, we will be discussing two confirmatory studies which reside outside the realm of Elliott wave analysis on a daily basis: MACD and Japanese candlesticks patterns. The presence of these studies has an impact on the confidence of a given count.
We hope by adding these studies that it will prove beneficial for our members, and please bear with us as we reach – together – the best presentation and full integration of these studies into our existing service.
Hourly Main Count
– Invalidation Point: 1.3720
– Confirmation Point: 1.3618
– Downwards Target : 1.3523
– Wave number: Minuette (c)
– Wave structure: Motive
– Wave pattern: Impulse or Ending Diagonal
Hourly Alternate Count
– Invalidation Point: 1.3618
– Confirmation Point: 1.3720
– Upwards Target : 1.3763
– Wave number: Submicro (5)
– Wave structure: Motive
– Wave pattern: Impulse
Elliott Wave chart analysis for the EURUSD for 6th 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 most likely unfolding as a zigzag labeled minuette waves (a), (b) and (c).
Minuette wave (b) probably unfolded as a double zigzag labeled subminuette waves w, x and y. It retraced 78.6% of minuette wave (a) and reached the upper trend line of the channel drawn around its subdivisions.
This count expects that minuette wave (b) is complete or very near completion, to be followed by a continuation of downwards movement in minuette wave (c) to complete minute wave ii. This will be confirmed by movement below 1.3398.
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. It’s also invalidated by movement above 1.3831 as within the zigzag of minute wave ii minuette wave (b) may not move beyond the start of minuette wave (a).
Main Hourly Wave Count
This count sees that subminuette wave y of minuette wave (b) unfolded as a zigzag labeled micro waves A, B and C.
Micro wave A unfolded as a leading diagonal labeled submicro waves (1) through (5).
Micro wave B unfolded as a zigzag labeled submicro waves (A), (B) and (C).
Micro wave C unfolded as an impulse labeled submicro waves (1) through (5).
Within micro wave C, submicro wave (1) formed an impulse.
Submicro wave (2) formed a running flat that retraced 78.6% of submicro wave (1).
Submicro wave (3) formed an impulse that reached almost 161.8% the length of submicro wave (1).
Submicro wave (4) retraced 38.2% of submicro wave (3).
And finally submicro wave (5) formed an ending diagonal that reached 100% the length of submicro wave (1).
This count expects that the entire correction of minuette wave (b) is now complete and that the euro will resume its downwards movement in minuette wave (c) to complete minute wave ii. This will be initially confirmed by movement below 1.3618.
This count is augmented by the presence of MACD divergence. While submicro wave (5) made a high above that of submicro wave (3), there was no corresponding high in momentum, which is a typical sign of fifth waves.
The count is also supported by the presence of the “shooting star” candlestick pattern at the end of submicro wave (5), which is one of the bearish reversal patterns.
Our initial target for this new downtrend is at 1.3523, and we’ll be able to calculate more precise targets once minuette wave (c) begins to subdivide.
Once the euro reaches our confirmation point, this wave count would be invalidated by movement above the end of minuette wave (b), which currently stands at 1.3720.
Alternate Hourly Wave Count
This alternate count is exactly the same as the main count, except it sees that submicro wave (5) is still unfolding, and that within it miniscule wave 1 formed a leading diagonal.
This count expects the euro to first move downwards in miniscule wave 2 and then to continue moving towards the upside to complete the rest of the subdivisions within submicro wave (5). This will be confirmed by movement above 1.3720. However, this count is currently not supported by either the MACD momentum indicator or by a recognizable candlestick pattern.
At 1.3763 submicro wave (5) would reach 161.8% the length of submicro wave (1).
This wave count is invalidated by movement below 1.3618 as miniscule wave 2 may not move beyond the start of miniscule wave 1.