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EURUSD 16th January, 2014

As expected the euro moved towards the upside to reach our first target and come within 4 pips of reaching our second target. Our two previous counts are so far still valid and have nearly equal probabilities, and we expect today to clarify which one of them is actually correct.

We’re updating our counts to reflect the most recent price action and to present tighter targets and invalidation points. As usual we’ll use each count’s invalidation point as confirmation of the other count.

Hourly Main Count
– Invalidation Point: 1.3698 – 1.3294
– Confirmation Point: 1.3580
– Downwards Target : 1.3555 – 1.3514
– Wave number: Submicro (3)
– Wave structure: Motive
– Wave pattern: Impulse

Hourly Alternate Count
– Invalidation Point: 1.3580 – 1.3892
– Confirmation Point: –
– Upwards Target : 1.3628 – 1.3657
– Wave number: Submicro (3)
– Wave structure: Motive
– Wave pattern: Impulse

Elliott Wave chart analysis for the EURUSD for 16th January 2014. Please click on the charts below to enlarge.

Main Daily Wave Count

eurusd-daily

eurusd-macd-daily

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 unfolded as a zigzag labeled minuette waves (a), (b) and (c) which retraced 50% of minute wave i.

Minute wave iii is forming an extension. Within it, minuette wave (i) unfolded as an impulse labeled subminuette waves i through v.

Minuette wave (ii) is most likely unfolding towards the downside as a zigzag labeled subminuette waves a, b and c.

This count expects that subminuette wave a is now complete and that the euro is moving upwards in subminuette wave b, which is either complete or near completion. If subminuette wave b is indeed complete, then we expect the continuation of downwards movement in subminuette wave c to complete minuette wave (ii).

The MACD indicator augments the view that subminuette wave c is already in progress towards the downside. It shows bearish momentum and what seems to be a false crossover.

In terms of candlestick analysis, the last bars are fairly bearish, and the most recent spinning top at this location doesn’t do much to contradict that.

At 1.3523 minuette wave (ii) would retrace 61.8% of minuette wave (i).

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 subminuette wave b may not move beyond the start of subminuette wave a.

Main Hourly Wave Count

eurusd-h1

eurusd-macd-h1

This count sees that the euro is now moving downwards in subminuette wave c, which seems to be unfolding as an impulse.

Within it, micro wave 1 unfolded as an impulse labeled submicro waves (1) through (5).

Micro wave 2 has most likely unfolded as a double zigzag labeled submicro waves (W), (X) and (Y), which retraced nearly 61.8% of micro wave 1. It’s possible that it’s still developing as a flat correction and that the double zigzag was only its A-wave, but it’s much more likely to be complete.

Micro wave 3 seems to be forming an extension, within which submicro wave (1) is complete.

Submicro wave (2) retraced 61.8% of submicro wave (1), so it’s most likely complete as well.

This count expects the the euro to continue moving downwards in submicro wave (3). This will be initially confirmed by movement below 1.3580.

The MACD indicator is inconclusive at this point. The momentum is clearly unstable and has already shown a false crossover, so we need to wait for it stabilize before we can use it reliably.

In terms of candlestick analysis, no clear patten appears at this point. The latest downwards movement has moved below 3 previous lows, so this increases the probability that at least the short-term direction is downwards.

At 1.3555 submicro wave (3) would reach 100% the length of submicro wave (1), then at 1.3514 it would reach 161.8% of its length.

This wave count is invalidated by movement above 1.3698 as micro wave 2 may not move beyond the start of micro wave 1. And as soon as we’ve confirmed that the euro is indeed moving in micro wave 3, we may lower the invalidation point to the end of micro wave 2, which currently stands at 1.3649.

Alternate Hourly Wave Count

eurusd-h1

The alternate count sees that subminuette wave b is still unfolding towards the upside 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 an expanded flat correction labeled submicro waves (A), (B) and (C).

Micro wave C seems to be unfolding as an impulse.

Within it, submicro wave (1) formed a leading diagonal labeled miniscule waves 1 through 5.

Submicro wave (2) formed a very deep expanded flat labeled miniscule waves A, B and C, which retraced 96% of submicro wave (1).

This count expects that the euro is now moving towards the upside within submicro wave (3).

At 1.3628 submicro wave (3) would reach 100% the length of submicro wave (1), then at 1.3657 it would reach 161.8% of its length.

This wave count is invalidated by movement below 1.3580 as within submicro wave (2) may not move beyond the start of submicro wave (1). It’s also invalidated by movement above 1.3892 as subminuette wave b may not move beyond the start of subminuette wave a.

2 thoughts on “EURUSD 16th January, 2014”

  1. Dear Tamer,

    In Alternate Hourly Wave Count, is target #1 correct for 1.3628?
    Without your navigation, I would be lost on the sea.

    Happy trading!!

    1. Hi Wooseok,

      Yes, at 1.3628 wave 3 would be equal to wave 1, which is always our “minimum” target for a third wave. Of course, since what this count assumes was wave 2 was very deep, that first target is quite short, so the second target (at least) is much more probable.

      And thank you – as always – for your kind words. With enough time and practice, you’ll be doing your own analysis before you know it 😀

      All the best,
      Tamer

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