The euro pushed a little higher, as expected under the alternate count, and came within 5 pips of reaching our second target. It’s likely that today price will give us a solid indication of the current pattern and its direction.
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: 1.3677
– Downwards Target : 1.3561 – 1.3481
– Wave number: Minute iii
– Wave structure: Motive
– Wave pattern: Impulse
Elliott Wave chart analysis for the EURUSD for 14th 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 very near completion, to be followed by a continuation of downwards movement.
The MACD indicator shows the fast line crossing upwards over the slow line, which doesn’t support this count. But unless the price action itself reaches our invalidation point, this count remains valid.
In terms of candlestick analysis, the last bar shows a “shooting star” pattern, which is a bearish reversal pattern that 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 is forming a triple combination labeled minuette waves (w), (x), (y), (x) and (z).
Minuette wave (z) is most likely unfolding as a zigzag labeled subminuette waves a, b and c.
Subminuette wave a unfolded as an impulse labeled micro waves 1 through 5, with micro wave 3 extending as an impulse labeled submicro waves (1) through (5).
Subminuette wave b formed a running barrier triangle labeled micro waves (A) through (E).
Subminuette wave c is most likely forming an ending diagonal labeled micro waves (1) through (5). There are two ways to label the subdivisions with this diagonal, and both have exactly the same consequence.
This count expects subminuette wave c to be very near completion, and that the euro will very soon start unfolding towards the downside in minute wave iii. This will be initially confirmed by movement below 1.3677, with much higher confirmation below 1.3561.
The MACD indicators supports this count by showing bearish divergence as well as a bearish crossover.
In terms of candlestick analysis, the “wedge” pattern has exactly the same consequences of the diagonal, both highly suggesting an end to this upwards movement, which strongly supports this count as well.
At 1.3561 price would reach the end of the last minuette wave (x), then at 1.3481 it would reach the end of the previous minuette wave (x). Once minute wave iii begins to subdivide we’ll be able to calculate more precise targets.
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.
Alternate Daily Wave Count
This alternate daily count sees that minor wave 2 is still unfolding towards the upside as an expanded flat labeled minute waves a, b and c.
Minute wave a itself formed an expanded flat labeled minuette waves (a), (b) and (c).
Minute wave b retraced 138.2% of minute wave a.
This count expects minute wave c to continue unfolding towards the upside to complete minor wave 2.
At 1.3760 minor wave 2 would retrace 61.8% of minor wave 1.
This wave count is invalidated by movement above 1.3892 as minor wave 2 may not move beyond the start of the minor wave 1.