The U.S. Dollar has gotten extremely aggressive against the Euro, forcing the pair to drop to the lowest low it has reached in over two years.
In light of this apparently-unstoppable trend, we now promote a different count (one that has been requested by many members) for the monthly movement of the euro. The original count is still valid — however, given the stronger evidence of the new count, and seeing that both counts have the exact same outlook for many months to come, we see no immediate need to include it, so that we can focus our attention on one high-probability count.
We’re updating our count to reflect the most recent price action and to present tighter targets and invalidation points.
Monthly Main Count
– Invalidation Point: 1.3993
– Confirmation Point: –
– Downwards Target : 1.1214 – 0.9903
– Wave number: Cycle x
– Wave structure: Corrective
– Wave pattern: Zigzag
Elliott Wave monthly chart analysis for the EURUSD for 5th December 2014. Please click on the charts below to enlarge.
Main Monthly Wave Count
The bigger picture sees the euro within the middle stage of a double combination labeled cycle waves w, x and y. (There are other ways to label this movement, but this is probably the most conservative count, and it exhibits near textbook Fibonacci relationships.)
Cycle wave w formed a zigzag labeled primary waves A, B and C.
Within it, primary wave A formed an impulse labeled intermediate waves (1) through (5), within which intermediate wave (3) formed an extension labeled minor waves 1 through 5.
Primary wave B formed an expanded flat labeled intermediate waves (A), (B) and (C), within which intermediate wave (B) retraced 161.8% of intermediate wave (A), and intermediate wave (C) reached 161.8% the length of intermediate wave (A).
Primary wave C formed an impulse labeled intermediate waves (1) through (5), within which intermediate waves (1) and (3) formed impulses labeled minor waves 1 through 5.
Cycle wave x is unfolding as a zigzag labeled primary waves A, B and C.
Primary wave A was an impulse.
Primary wave B formed a contracting triangle labeled intermediate waves (A) through (E), each subdividing as a zigzag labeled minor waves A, B and C, except for intermediate wave (E) which formed a double zigzag labeled minor waves W, X and Y.
Intermediate wave (E) reached just short of 61.8% the length of intermediate wave (C), and it retraced a bit short of 61.8% of intermediate wave (D) — both of which are very dependable Fibonacci relationships, highly suggesting that primary wave B is complete.
This count expects the euro to continue its decline in primary wave C, which is most likely unfolding as an impulse labeled intermediate waves (1) through (5), thereby completing cycle wave x.
The MACD indicator is inconclusive at this point. It does show decreasing momentum and a bearish crossover, which is a good sign, but it’s also the same exact sign that appeared a few times before on the chart.
At 1.1214 cycle wave x would retrace 61.8% of cycle wave w, then at 0.9903 it would retrace 78.6% of its length.
This count is invalidated by movement above 1.3993 as intermediate wave (2) may not move beyond the start of intermediate wave (1).