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EURUSD – Nearing a Temporary Bottom

As expected the euro moved towards the downside to reach and exceed our first target.

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: 1.3730 – 1.3294
– Confirmation Point: –
– Upwards Target : 1.3637 – 1.3671
– Wave number: Micro 4
– Wave structure: Corrective
– Wave pattern: Zigzag, Flat, Triangle, or Combination

6-Hour Alternate Count

– Invalidation Point: 1.4204 – 1.3294
– Confirmation Point: –
– Upwards Target : 1.3860 – 1.3892
– Wave number: Subminuette b
– Wave structure: Corrective
– Wave pattern: Zigzag, Flat, or Combination

Elliott Wave chart analysis for the EURUSD for 3rd January, 2014. 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.

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

Within subminuette wave a, micro waves 1 through 3 are most likely complete, with micro wave 3 forming an extension labeled submicro waves (1) through (5).

This count expects micro wave 3 to be either complete or very near completion and that the euro will soon move sideways to upwards within micro wave 4.

The MACD indicator doesn’t show any particularly useful information at this point to either support or contradict this count.

In terms of candlestick analysis, no significant pattern appears at this point.

At 1.3637 micro wave 4 would retrace 23.6% of micro wave 3, then at 1.3671 it would retrace 38.2% of its length.

This wave count is invalidated by movement above 1.3730 as within the impulse of subminuette wave a micro wave 4 may not enter the price territory of micro wave 1. It’s also invalidated by movement below 1.3294 as minuette wave (ii) may not move beyond the start of minuette wave (i).

Alternate 6-Hour Wave Count

eurusdweekly

This alternate count sees that minuette wave (ii) is actually unfolding as a flat correction, not a zigzag, within which subminuete wave a is either complete or very near completion.

Subminuette wave a unfolded as a zigzag labeled micro waves A, B and C.

This count expects micro wave C to be either complete or very near completion and that the euro will soon move towards the upside in subminuette wave b to retrace at least 90% of subminuette wave a.

At 1.3860 subminuette wave b would retrace 90% of subminuette wave a, then at 1.3892 it would retrace 100% of its length.

No invalidation points can be placed on the upside for this count yet, but it’s extremely unlikely for subminuette wave b to move beyond 1.4204, where it would retrace 200% the length of subminuette wave a.

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