Today the euro lost another 37 pips of its value against the U.S. dollar — which was not what we expected.
However, the euro immediately regained most of its losses. In addition, momentum indicators are still showing a divergence. These two reasons, along with the larger pattern, suggest that price should see a period of sideways-to-upwards consolidation over the near-term.
We’re updating our counts to reflect the most recent price action and to present tighter targets and invalidation points.
Hourly Main Count
– Invalidation Point: 1.3577
– Confirmation Point:
– Upwards Target : 1.3435 – 1.3476
– Wave number: Minuette (iv)
– Wave structure: Corrective
– Wave pattern: Zigzag, Flat, Triangle, or Combination
Elliott Wave chart analysis for the EURUSD for 30th July 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, C and D are complete.
Primary wave E is unfolding towards the downside most likely as a zigzag labeled intermediate waves (A), (B) and (C).
Intermediate wave (A) is probably forming an impulse labeled minor waves 1 through 5.
Minor wave 1 formed a leading diagonal labeled minute waves i through v.
Minor wave 2 formed a flat labeled minute waves a, b and c, which retraced just over 38.2% of minor wave 1, and is now complete.
This count expects the euro to be continuing its downwards movement in minor wave 3, which must unfold as an impulse labeled minute waves i through v.
The MACD indicator supports this count by showing a bearish crossover, as well as bearish momentum with both the fast and slow lines being below the zero-line.
In terms of candlestick analysis, no clear pattern appears at this point, but downwards bars appear to be strongly impulsive.
At 1.3211 minor wave 3 would reach 100% the length of minor wave 1, then at 1.2907 it would reach 161.8% of its length.
This wave count is invalidated by movement above 1.3701 as this is the assumed start of minor wave 3.
Main Hourly Wave Count
This count sees that minute wave i is unfolding towards the downside as an impulse labeled minuette waves (i) through (v).
Minuette wave (iii) unfolded as an impulse labeled subminuette waves i through v.
Within it, subminuette wave v formed an impulse labeled micro waves 1 through 5.
Micro wave 5 formed an extension labeled submicro waves (1) through (5), reaching 161.8% the length of micro wave 3.
Within it, submicro wave (2) formed a zigzag labeled miniscule waves A, B and C.
Submicro wave (3) formed an impulse labeled miniscule waves 1 through 5.
Submicro wave (4) formed a double combination labeled miniscule waves W, X and Y.
Submicro wave (5) formed an extension labeled miniscule waves 1 through 5, reaching 161.8% the length of submicro wave (3).
This count expects the euro to move sideways to upwards in minuette wave (iv).
The MACD indicator supports this count by showing a very clear bullish divergences, as well as a bullish crossover.
In terms of candlestick analysis, no clear pattern appears at this point.
At 1.3435 minuette wave (iv) would retrace 23.6% of minuette wave (iii), then at 1.3476 it would retrace 38.2% of its length.
This wave count is invalidated by movement above 1.3577 as minuette wave (iv) within this impulse may not enter the price territory of minuette wave (i).