The euro continued its slow, strained downwards movement to 1.3706, where it hit four levels of support at different wave degrees (as we’ll show in a minute). Chances are the downwards correction is now complete and we should be ready for an explosive rally. But until this is confirmed by price action, a continuation of the downwards correction is not yet out of the picture
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 to confirm the other count.
Hourly Main Count
– Invalidation Point: 1.3706
– Confirmation Point: 1.3877
– Upwards Target : 1.3877 – 1.3968
– Wave number: Subminuette i
– Wave structure: Motive
– Wave pattern: Impulse or Leading Diagonal
Hourly Alternate Count
– Invalidation Point: 1.3877
– Confirmation Point: 1.3706
– Downwards Target : 1.3665
– Wave number: Subminuette z
– Wave structure: Corrective
– Wave pattern: Zigzag, Flat, or Triangle
Elliott Wave chart analysis for the EURUSD for 28th March 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.
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 wave (Y) 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 — and it may also be forming an expanded flat, but we’ll reserve this possibility until price action provides a reason to bring it back.
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 complete and minuette wave (ii) is either complete or near completion.
This count expects the euro to continue moving towards the upside to complete the rest of the subdivisions within minute wave iii.
The MACD indicator neither supports nor contradicts this view at this point.
In terms of candlestick analysis, no clear pattern appears at this point, but the last bar at the end of minuette wave (ii) suggests indecision by showing a very small body with a relatively long lower wick.
At 1.4196 minuette wave (iii) would reach 100% the length of minuette wave (i), then at 1.4498 it would reach 161.8% of its length.
This wave count is invalidated by movement below 1.3478 as minuette wave (ii) may not move beyond the start of minuette wave (i).
Main Hourly Wave Count
This count sees minuette wave (ii) unfolded towards the downside as a double combination labeled subminuette waves w, x and y.
Subminuette wave w formed a zigzag labeled micro waves A, B and C.
Subminuette wave x formed a zigzag labeled micro waves A, B and C, retracing about 61.8% of subminuette wave w.
Subminuette wave y formed a zigzag labeled micro waves A, B and C, with micro wave C forming an impulse labeled submicro waves (1) through (5).
At this point the euro has hit a cluster of support levels: submicro wave (5) reached 61.8% the length of submicro wave (1), micro wave C reached 100% the length of micro wave A, subminuette wave y reached 78.6% the length of subminuette wave w, and minuette wave (ii) retraced 50% of minuette wave i. All this suggests that minuette wave (ii) is most likely complete.
This count expects subminuette wave i of minuette wave (iii) to start unfolding towards the upside. This will be initially confirmed by movement above 1.3877.
The MACD indicator supports this count by showing a series of very clear bullish divergences, where price has made lower lows that momentum clearly failed to reflect.
In terms of candlestick analysis, no clear pattern appears at this point, but the recent downwards movement looks fairly corrective, not motive.
At 1.3877 price would reach the high of the previous subminuette wave x, then at 1.3968 it would reach the high of minuette wave (i). We’ll be able to calculate more precise targets once the new uptrend begins to subdivide.
This wave count is invalidated by movement below 1.3706 as within subminuette wave i of minuette wave (iii) no wave may move beyond the start of the first wave.
Alternate Hourly Wave Count
This count sees that minuette wave (ii) is unfolding as a triple combination labeled subminuette waves w through z.
Within it, subminuette waves w, x and y are complete (as per the main count).
This count expects the euro first to move a bit upwards in the second subminuette wave x, before resuming its downwards movement in the final subminuette wave z to complete minuette wave (ii). This will be initially confirmed by movement below 1.3706.
At 1.3665 minuette wave (ii) would retrace 61.8% of minuette wave (i).
This wave count is invalidated by movement below 1.3478 as minuette wave (ii) may not move beyond the start of minuette wave (i), as well as by movement above 1.3877 as it’s extremely unlikely for the second x-wave in a triple combination to move beyond the end of the previous x-wave.