Price dropped rather sharply for over 200 pips, invalidating once and for all our preferred count of an impulse towards the upside.
This brings us to the second most likely count, which is that of a leading diagonal.
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: 1.1209 – 1.0462
– Confirmation Point: –
– Upward Target: 1.1051 – 1.1081
– Wave number: Minuette (ii)
– Wave structure: Corrective
– Wave pattern: Expanded Flat
Elliott Wave chart analysis for the EURUSD for 22nd May, 2015. Please click on the charts below to enlarge.
Main Daily Wave Count
The bigger picture sees that the euro is starting a significant uptrend in cycle wave y, which may be unfolding as a zigzag labeled primary waves A, B and C, where primary wave A is forming an impulse labeled intermediate waves (1) through (5).
Intermediate wave (1) is forming a leading diagonal labeled minor waves 1 through 5.
Minor wave 1 formed a zigzag labeled minute waves a, b and c.
Minor wave 2 is forming another zigzag labeled minute waves a, b and c.
This count expects the euro to be continue moving towards the downside a bit further in minor wave 2.
At 1.0846 minor wave 2 would retrace 61.8% of minor wave 1, then at 1.0677 it would retrace 78.6% of its length.
This wave count is invalidated by movement below 1.0462 as minor wave 2 may not move beyond the start of minor wave 1.
Main Hourly Wave Count
This count sees that minor wave 2 is forming a zigzag labeled minute waves a, b and c.
Minute wave a formed an impulse labeled minuette waves (I) through (v).
Minute wave b formed a double combination labeled minuette waves (w), (x) and (y), retracing 38.2% of minute wave a.
Minute wave c is now forming either an impulse or an ending diagonal, labeled minuette waves (I) through (v).
Assuming that it’s an impulse, minuette wave (ii) seems to be forming an expanded flat labeled subminuette waves a, b and c.
This count expects the euro to move for a bit towards the upside in subminuette wave c to complete minuette wave (ii).
At 1.1051 minuette wave (ii) would retrace 23.6% of minuette wave (i), then at 1.1081 it would retrace 38.2% of its length.
This wave count is invalidated by movement above 1.1209 as minuette wave (ii) may not move beyond the start of minuette wave (i). Once price breaches this invalidation point, we’ll know that the entire minor wave 2 is complete and that minor wave 3 is unfolding towards the upside.