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EURUSD – An Unexpected Rally? Maybe Not!

As expected by our alternate count, the euro moved towards the upside to reach both of our targets exactly to the pip.

And given the price action of last week, we’re updating our counts to reflect the most recent price action and to present tighter targets and invalidation points.

6-Hour Main Count

– Invalidation Point: 1.3892 – 1.3294
– Confirmation Point: –
– Downwards Target : 1.3664 – 1.3523
– Wave number: Minuette (ii)
– Wave structure: Corrective
– Wave pattern: Zigzag

Elliott Wave chart analysis for the EURUSD for 27th December, 2013. Please click on the charts below to enlarge.

Main 6-Hour Wave Count

eurusdweekly

eurusdweekly

The bigger picture sees the euro moving upwards in minute wave iii, which is forming an extension.

Within it, minuette wave (i) unfolded as an impulse labeled subminuette waves i through v, which are well contained within their Elliott channel.

Subminuette wave i unfolded as a leading diagonal labeled micro waves 1 through 5.

Subminuette wave ii unfolded a zigzag.

Subminuette wave iii formed an extension labeled micro waves 1 through 5, within which micro wave 3 itself unfolded in a series of extensions.

Subminuette wave iv unfolded as a contracting triangle labeled micro waves A through E.

Once subminuette wave iv was complete, subminuette wave v moved in the typical manner expected from a post-triangle thrust. It shot up to reach and exceed the origin of the triangle, before immediately reversing and retracing over 3/4 of its advance, as part of the retracement in minuette wave (ii).

This count expects that minuette wave (ii) is now unfolding towards the downside, most likely as a zigzag labeled subminuette waves a, b and c. This will be initially confirmed by a break below the lower trend line of the channel drawn around the subdivisions of minuette wave (i).

The MACD indicator strongly augments this count by showing very strong bearish divergences. While price has made higher and higher tops, momentum is consistently decreasing, forming lower highs.

In terms of candlestick patterns, the most recent bars show a bearish “Marubozo” pattern, which is a very strong bearish signal that further augments this count.

At 1.3664 minuette wave (ii) would retrace 38.2% of minuette wave (i), then at 1.3523 it would retrace 61.8% of its length.

This wave count is invalidated by movement below 1.3294 as minuette wave (ii) may not move beyond the start of minuette wave (i). It’s also invalidated by movement above 1.3892 as within a zigzag a B-wave may not move beyond the start of the A-wave.

4 thoughts on “EURUSD – An Unexpected Rally? Maybe Not!”

  1. Dear sir,
    I want to know that how to count correctly wave in chart time frame? If am i right
    1.from 5 minute chart=red lable count(micro)
    2from15 minute chart frame=acqua

    1. Hi Deepak,

      That’s a great question. Wave degrees (and their colors) don’t depend on time, but on their internal subdivisions.

      Sure, we usually relate some wave degrees with certain time periods. For example, a wave in a certain degree usually spans a few hours, another spans several days, while another may span multiple millennia.

      But this isn’t always the case. For example, a wave degree that usually spans a few hours may be complete in only an hour or even less. So long as its subdivisions are complete, a wave doesn’t need to depend on time.

      I hope that managed to answer your question. And if you need to ask about anything else, please feel more than welcome to do so at any time.

      All the best,
      Tamer

    1. Dear Deepak,

      We use MotiveWave as our charting software. The wave itself it analyzed by our Tamer/Nady and they merely use MotiveWave to help in the charting process.

      Proficiency in EW doesn’t lies in the software but the skill in analyzing patterns and staying true to its principles.

      But if you’re interesting in trying out MotiveWave, you can get a 14 days trial here:
      https://www.elliottwaveforex.com/out/motivewave/

      Kind regards,
      Admin, ElliottWaveForex.com

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