As expected the euro moved towards the downside to reach our first target and exceed it by 17 pips.
Now we have several possibilities, but we’ll focus this week on the two most probable: either the euro continues its strained decline (a possibility which doesn’t find much support in the technical picture) or it finally picks up and shoots upwards in an explosive fashion over the coming weeks.
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.
6-Hour Main Count
– Invalidation Point: 1.3706
– Confirmation Point: 1.3877 – 1.3968
– Upwards Target : 1.4196 – 1.4498
– Wave number: Minuette (iii)
– Wave structure: Motive
– Wave pattern: Impulse
6-Hour Alternate Count
– Invalidation Point: 1.3877 – 1.3478
– Confirmation Point: 1.3706
– Downwards Target : 1.3665
– Wave number: Minuette (ii)
– Wave structure: Corrective
– Wave pattern: Triple Combination
Elliott Wave chart analysis for the EURUSD for 28th March, 2014. Please click on the charts below to enlarge.
Main 6-Hour Wave Count
The bigger picture sees the euro moving upwards in minute wave iii, within minor wave C, within intermediate wave (Y) of primary wave D.
Minute wave iii is unfolding as an impulse.
Within it, minuette wave (i) formed an impulse labeled subminuette waves i through v.
Within it, subminuette i formed an impulse.
Subminuette wave ii formed an expanded flat labeled micro waves A, B and C.
Subminuette wave iii formed an impulse labeled micro waves 1 through 5.
Subminuette wave iv formed a zigzag labeled micro waves A, B and C.
And finally subminuette wave v formed an impulse labeled micro waves 1 through 5.
After that minuette wave (ii) began unfolding towards the downside as a double combination labeled subminuette waves w, x and y, retracing 50% of minuette wave (i).
This count expects that minuette wave (ii) is now complete and that minuette wave (iii) will start unfolding towards the upside. This will be initially confirmed by movement above 1.3877, with higher confidence above 1.3968.
The MACD indicator supports this count by showing a bullish divergence, where price made a lower low that momentum failed to reflect.
In terms of candlestick analysis, this count is supported by the bullish “hammer” pattern which appears at the end of minuette wave (ii).
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 1.3706 as within minuette wave (iii) no wave may move beyond the start of the first wave.
Alternate 6-Hour Wave Count
This count sees that minuette wave (ii) is still unfolding towards the downside 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.