Archives for December 2014
The euro had another extremely bearish week, driving the currency pair 350 pips lower. From a price standpoint, the picture is looking pretty grim.
But wave patterns and momentum readings put an interesting perspective on the whole picture, and may even suggest that the euro could start the new year with a bang.
And speaking of the new year, be sure to check our current holiday special offer at ElliottWaveForex.com.
Weekly Main Count
– Invalidation Point: 1.3993
– Confirmation Point: 1.2570
– Upwards Target : 1.2895 – 1.3315
– Wave number: Intermediate (2)
– Wave structure: Corrective
– Wave pattern: Zigzag, Flat, or Combination
Weekly Alternate Count
– Invalidation Point: 1.2570
– Confirmation Point: –
– Downwards Target : 1.2079 – 1.1776
– Wave number: Minor 5
– Wave structure: Motive
– Wave pattern: Impulse or Ending Diagonal
Elliott Wave chart analysis for the EURUSD for 22nd December, 2014. Please click on the charts below to enlarge.
Main Weekly 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 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.
Primary wave C is unfolding as an impulse labeled intermediate waves (1) through (5).
Intermediate wave (1) is forming an impulse labeled minor waves 1 through 5.
Within it, minor wave 2 retraced 38.2% of minor wave 1.
Minor wave 3 reached a bit over 261.8% the length of minor wave 1.
Minor wave 5 slightly exceeded 61.8% the length of minor wave 1.
This count expects intermediate wave (1) to be either complete or very near completion, and that the euro will start moving toward the upside in intermediate wave (2). This will be initially confirmed by movement above 1.2570.
The MACD indicator is about to form a bullish crossover and the Stochastic indicator is very deeply oversold.
At 1.2895 intermediate wave (2) would retrace 38.2% of intermediate wave (1), then at 1.3315 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).
Alternate Weekly Wave Count
This count expects minor wave 5 to be still unfolding toward the downside.
At 1.2079 minor wave 5 would reach 100% the length of minor wave 1, then at 1.1776 it would reach 161.8% of its length.
This wave count is invalidated by movement above 1.2570 as this is the start of minor wave 5.