Another slow day for the euro where price seemed to be going nowhere. But despite this indecision in price, the technical picture is actually getting clearer.
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: 1.3738
– Confirmation Point: 1.3551 – 1.3481
– Downwards Target : 1.3421 – 1.3261
– Wave number: Minute iii
– Wave structure: Motive
– Wave pattern: Impulse
Hourly Alternate Count
– Invalidation Point: 1.3575 – 1.3738
– Confirmation Point: 1.3682
– Upwards Target : 1.3694 – 1.3735
– Wave number: Subminuette c
– Wave structure: Motive
– Wave pattern: Ending Diagonal
Elliott Wave chart analysis for the EURUSD for 11th February 2014. Please click on the charts below to enlarge.
Main Daily Wave Count
The bigger picture sees the euro moving sideways in cycle wave x, which is forming a contracting triangle labeled primary waves A through E.
Within it, primary waves A, B and C are complete, and it’s highly likely that primary wave D is complete as well.
Primary wave D unfolded as a double zigzag labeled intermediate waves (W), (X) and (Y).
Within intermediate wave (Y), minor wave A formed an impulse, minor wave B formed a zigzag, and the final minor wave C formed an impulse labeled minute waves i through v.
Primary wave D tested the 61.8% retracement level of primary wave C and immediately rebounded, so it’s highly likely to be complete and that primary wave E is now unfolding towards the downside as either a zigzag or a zigzag combination.
Within primary wave E, intermediate wave (A) seems to be unfolding as an impulse labeled minor waves 1 through 5, within which minor waves 1 and 2 are most likely complete.
This count expects that the euro is now moving towards the downside in minor wave 3. Within it, minute wave i is complete and minute wave ii is either complete or very near completion, to be followed by a continuation of downwards movement.
The MACD indicator shows the fast line crossing over the slow line, with both lines still below the zero line, so unless the price action itself reaches our invalidation point, this count remains valid.
In terms of candlestick analysis, the recent bar shows a bearish “shooting star” pattern, which supports this count.
At 1.3394 minor wave 3 would reach 100% the length of minor wave 1, then at 1.3181 it would reach 161.8% of its length.
This wave count is invalidated by movement above 1.3738 as within minor wave 3 no second wave may move beyond the start of the first wave.
Main Hourly Wave Count
This count sees that minute wave ii unfolded as a double combination labeled minuette waves (w), (x) and (y).
Minuette wave (w) formed an expanded flat labeled subminuette waves a, b and c.
Minuette wave (x) formed a combination labeled subminuette waves w, x and y.
Minuette wave (y) formed a zigzag labeled subminuette waves a, b and c, bringing minute wave ii exactly to the 78.6% retracement level.
Within minuette wave (y), subminuette wave c is unfolding as an ending diagonal labeled micro waves 1 through 5.
The subdivisions of this diagonal are not optimal, but they all adhere to the rules, and it’s actually the best labeling for this slow, overlapping movement at this position.
This count expects that minute wave ii is complete, to be followed by minute wave iii unfolding towards the downside.
The MACD indicator shows a series of clear bearish divergences, a bearish crossover, and strongly bearish momentum, all strongly supporting this count.
In terms of candlestick analysis, no significant pattern appears at this point, other than the “wedge” pattern which has the same implications as a diagonal.
This count would be initially confirmed by movement below 1.3551, with final confirmation below 1.3481.
At 1.3421 minute wave iii would reach 100% the length of minute wave i, then at 1.3261 it would reach 161.8% of its length.
This wave count is invalidated by movement above 1.3738 as within minute wave ii may not move beyond the start of minute wave i. Once price reaches our confirmation point, we may lower the invalidation point to the end of minute wave ii, which currently stands at 1.3682.
Alternate Hourly Wave Count
This count sees that, within subminuette wave c, only micro waves 1 through 4 are complete, so it expects a final upwards push in micro wave 5.
This count is much lower in probability because: 1) it’s not supported at all by momentum, and 2) its subdivisions and overall shape would be very unsatisfactory.
At 1.3694 micro wave 5 would reach 61.8% the length of micro wave 3, then at 1.3735 it would reach 100% of its length.
This wave count is invalidated by movement above 1.3738 as within minute wave ii may not move beyond the start of minute wave i. It’s also invalidated by movement below 1.3575 as micro wave 4 may not move beyond the start of micro wave 3.