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EURUSD – And Down It Goes

As expected the euro moved towards the upside to reach the first target of our main count and exceed it by 12 pips.

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.

6-Hour Main Count

– Invalidation Point: 1.3810
– Confirmation Point: 1.3624
– Downwards Target : 1.3546 – 1.3446
– Wave number: Subminuette iii
– Wave structure: Motive
– Wave pattern: Impulse

6-Hour Alternate Count

– Invalidation Point: 1.3612
– Confirmation Point: –
– Upwards Target : 1.3789 – 1.3892
– Wave number: Submicro (5)
– Wave structure: Motive
– Wave pattern: Impulse or Ending Diagonal

Elliott Wave chart analysis for the EURUSD for 20th December, 2013. Please click on the charts below to enlarge.

Main 6-Hour Wave Count

eurusdweekly

eurusdweekly

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 wave i unfolded as an impulse, 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) has unfolded as a double zigzag labeled subminuette waves w, x and y. So far it has retraced over 96% of minuette wave (a), fulfilling the requirement of a flat correction.

The final subminuette wave y unfolded as a zigzag labeled micro waves A, B and C.

Micro wave A unfolded as an impulse labeled submicro waves (1) through (5).

Micro wave B unfolded as a zigzag.

Micro wave C unfolded as an impulse labeled submicro waves (1) through (5), and reached 127.2% the length of micro wave A.

Submicro wave (3) formed a series of extensions, the first labeled miniscule waves 1 through 5, then miniscule wave 3 extended into nano waves i through v.

Submicro wave (4) unfolded as a contracting triangle labeled miniscule waves A through E.

Submicro wave (5) reached 100% the length of submicro wave (1), thereby completing micro wave C, subminuette wave y, and the entire correction of minuette wave (b) to the upside.

After that minuette wave (c) began unfolding towards the downside, most likely as an impulse.

Within it, subminuette wave i seems to have unfolded as an impulse and subminuette wave ii as an expanded flat labeled micro waves A, B and C, which retraced 38.2% of subminuette wave i, so it’s either complete or very near completion.

This count expects the euro to soon resume its downwards movement in subminuette wave iii. This would be confirmed by movement below 1.3624.

This count is strongly supported by the presence of a very clear divergence on the MACD indicator, where the momentum at the end of submicro wave (5) is much lower than it was at the end of submicro wave (3), which is very typical of this kind of movement and strongly indicates a price reversal.

In addition, the presence of a very strong “bearish engulfing pattern” at the beginning of minuette wave (c) also supports this count.

At 1.3546 subminuette wave iii would reach 100% the length of subminuette wave i, then at 1.3446 it would reach 161.8% of its length.

This wave count is invalidated by movement above 1.3810 as subminuette wave ii may not move beyond the start of subminuette wave i.

Alternate 6-Hour Wave Count

eurusdweekly

This alternate count sees that micro wave C of subminuette wave y of minuette wave (b) is still unfolding.

Within it, submicro waves (1) through (4) are complete, with submicro wave (4) being a very deep zigzag correction labeled miniscule waves A, B and C, which retraced over 61.8% of submicro wave (3).

This count expects the euro to continue moving towards the upside in submicro wave (5).

This count is much lower in probability than the main count, firstly because its subdivisions are not a very good fit, secondly because of its very atypical wave relationships, and thirdly because it’s contradicted by the MACD indicator.

At 1.3789 submicro wave (5) would reach 61.8% the length of submicro wave (3), resulting in a truncated fifth wave, then at 1.3892 it would reach 100% of its length.

This wave count is invalidated by movement below 1.3612 as submicro wave (4) may not enter the price territory of submicro wave (1).

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