EURUSD 26th December, 2014

Even though the euro just touched our invalidation point, it hasn’t made a new low yet. Seeing that this is actually another point that supports our current view, we’ve slightly modified our main count to account for the latest developments.

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: 1.2165
– Confirmation Point: 1.2220
– Upward Target : 1.2258 – 1.2314
– Wave number: Minuette (iii)
– Wave structure: Motive
– Wave pattern: Impulse

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

Main Daily Wave Count

eurusd-20141219-daily-main

The bigger picture sees the euro moving towards the downside in primary wave C (of cycle wave x), which is unfolding as an impulse labeled intermediate waves (1) through (5).

Intermediate wave (1) formed an impulse labeled minor waves 1 through 5.

Within it, 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, retracing 38.2% of minor wave 1.

Minor wave 3 formed an impulse labeled minute waves i through v, reaching well over 261.8% the length of minor wave 1. Within it, minute waves i, iii and v each subdivided as an impulse labeled minuette waves (i) through (v).

Minor wave 4 retraced 23.6% of minor wave 3.

Minor wave 5 formed an impulse, reaching 78.6% the length of minor wave 1, and coming right down to the lower trend line of the channel drawn around minor waves 1 through 5.

This count expects intermediate wave (1) to be complete or very near completion, and that the euro is about to move toward the upside in intermediate wave (2). This will be initially confirmed by movement above 1.2570.

It’s still too early to label any subdivisions within intermediate wave (2). But if we assume the simplest possible pattern, we could expect it to be unfolding as a zigzag labeled minor waves A, B and C, and within it minor wave A is forming an impulse labeled minute waves i through v.

At 1.2863 intermediate wave (2) would retrace 38.2% of intermediate wave (1), then at 1.3295 it would retrace 61.8% of its length.

This wave count is invalidated by movement above 1.3993 as intermediate wave (2) may not move beyond the start of intermediate wave (1).

Main Hourly Wave Count

eurusd-20141219-hourly-main

This count sees that minor wave 5 formed an impulse labeled minute waves i through v.

Minute wave iii formed an impulse labeled minuette waves (i) through (v), where minuette wave (iii) formed an extension labeled subminuette waves i through v.

Price has very likely completed minute wave v, and thereby minor wave 5, and thereby intermediate wave (1).

Accordingly, price may now be moving toward the upside in minute wave i, which is forming an impulse labeled minuette waves (i) through (v).

Minuette wave (i) formed an impulse labeled subminuette waves i through v.

Minuette wave (ii) formed an expanded flat labeled subminuette waves a, b and c.

This count expects the euro to continue moving toward the upside in minuette wave (iii). This will be initially confirmed by movement above 1.2220.

The MACD indicator supports this count by showing a series of bullish divergences, in addition to a bullish crossover.

At 1.2258 minuette wave (iii) would reach 161.8% the length of minuette wave (i), then at 1.2314 it would reach 261.8% of its length.

This wave count is invalidated by movement below 1.2165 as minuette wave (ii) may not move beyond the start of minuette wave (i).

If price moves below this invalidation point, then minute wave v is still unfolding. But we should keep in mind that its downward potential should be quite limited.

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