The euro spent the day moving lower, although it failed to make any new lows and kept away from all our confirmation and invalidation points. Both counts are still valid so far, and we’ll have to wait for price action to tell us which count the market will follow.
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 : 1.3869 – 1.3940
– Wave number: Micro 3
– Wave structure: Motive
– Wave pattern: Impulse
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 2nd April 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 few bars at the end of minuette wave (ii) suggest indecision by showing both a “spinning top” and a “doji”.
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.
At this stage, it’s a bit too early to accurately label the subdivisions within the newly-developing minuette wave (iii). But estimating by previous waves, it’s likely that subminuette wave i of minuette wave (iii) is now developing towards the upside, most likely as an impulse.
Within it, micro wave 1 probably formed a leading diagonal labeled submicro waves (1) through (5).
Micro wave 2 may have formed a zigzag labeled submicro waves (A), (B) and (C), which retraced almost 61.8% of micro wave 1. It could also be forming a more complex correction, such as a flat or a combination.
This count expects micro wave 3 soon to start unfolding towards the upside. This will be initially confirmed by movement above 1.3821, with higher confidence above 1.3877.
The MACD indicator is actually showing bearish momentum, but it also seems to be forming a hidden bullish divergence. So we’ll have to let price action provide us with more data before we can make a logical decision.
In terms of candlestick analysis, no clear pattern appears at this point.
At 1.3869 micro wave 3 would reach 100% the length of micro wave 1, then at 1.3940 it would reach 161.8% of its length.
This wave count is invalidated by movement below 1.3706 as micro wave 2 may not move beyond the start of micro wave 1.
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.
The second subminuette wave x formed a double zigzag labeled micro waves W, X and Y, retracing over 61.8% of subminuette wave y, so it’s most likely complete as well.
This count expects the euro to resume its downwards movement in the final subminuette wave z to complete minuette wave (ii). This will be 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.