EURUSD 26th February, 2014

Finally the euro shows some action with a strong downwards movement that brought the euro within 30 pips of our target. If all goes as expected, the euro will now be building a bottom and preparing for upwards continuation.

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: 1.3561
– Confirmation Point: 1.3772
– Upwards Target : 1.3781 – 1.3862
– Wave number: Subminuette v
– Wave structure: Actionary Corrective
– Wave pattern: Zigzag

Elliott Wave chart analysis for the EURUSD for 26th February 2014. Please click on the charts below to enlarge.

Main Daily Wave Count

eurusd-daily

eurusd-macd-daily

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.

Primary wave D is possibly forming a double zigzag labeled intermediate waves (W), (X) and (Y), where intermediate waves (W) and (X) are complete.

Intermediate mediate is unfolding as a zigzag labeled minor waves A, B and C.

Minor wave A formed an impulse labeled minute waves i through v.

Minor wave B formed a zigzag labeled minute waves a, b and c.

Minor wave C is forming an impulse labeled minute waves i through v.

Within it, minute wave i formed an impulse labeled minuette waves (i) through (v).

Minute wave ii formed a zigzag labeled minuette waves (a), (b) and (c).

Minute wave iii is unfolding as an impulse, and within it minuette wave (i) is now unfolding towards the upside.

This count expects the euro to continue moving towards the upside in minute wave iii. This will be confirmed by movement above 1.3892.

The MACD indicator supports this count by showing a bullish crossover and increasing upwards momentum. Both slow and fast lines are now above the zero line, which is another bullish signal.

In terms of candlestick analysis, the last bar shows a moderately strong “bearish engulfing pattern” that corresponds perfectly to the bottom expected by the hourly count (as we’ll discuss in a minute).

At 1.4073 minute wave iii would reach 100% the length of minute wave i.

This wave count is invalidated by movement below 1.3476 as within minute wave iii no second wave may move beyond the start of the first wave.

Main Hourly Wave Count

eurusd-h1

eurusd-macd-h1

This count sees that minuette wave (i) of minute wave iii is most likely forming an expanding leading diagonal labeled subminuette waves i through v. Within it, subminuette waves i and iii are complete.

Subminuette wave iv unfolded towards the downside as a double zigzag labeled micro waves W, X and Y.

Micro wave W formed a zigzag labeled submicro waves (A), (B) and (C).

Micro wave X formed a very deep triple combination labeled submicro waves (W) through (Z).

Micro wave Y formed a zigzag labeled submicro waves (A), (B) and (C), which are either complete or near completion.

Submicro wave (C) reached 161.8% the length of submicro wave (A), and micro wave Y reached 127.2% the length of micro wave W. This Fibonacci cluster forms a strong band of support for the euro, which increases the probability that a bottom is now in place.

This count expects subminuette wave v to start unfolding towards the upside to complete minuette wave (i). This will be confirmed by movement above 1.3772.

The MACD indicator shows both the slow and the fast lines being below the zero-line, which is generally a bearish sign. However, the fast line seems about to cross over the slow line, which would be an early bullish indication.

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

At 1.3781 subminuette wave v would reach 61.8% the length of subminuette wave iii, then at 1.3862 it would reach 100% of its length

This wave count is invalidated by movement below 1.3561 as subminuette wave iv may not move beyond the start of subminuette wave iii.

Alternate Daily Wave Count

eurusd-daily

This alternate daily count sees that primary wave D is complete and that primary wave E is unfolding towards the downside.

Within it, intermediate wave (A) is forming an impulse labeled minor waves 1 through 5.

Minor wave 1 formed an impulse.

Minor wave 2 is forming an expanded flat labeled minute waves a, b and c.

This count expects minor wave 2 to be completed soon, perhaps within a day or two, before the euro turns downwards in minor wave 3. This would be confirmed by movement below 1.3476.

We’ll be able to calculate targets for minor wave 3 once we’ve confirmed that minor wave 2 is complete.

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.

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