EURUSD 28th May, 2015

As expected the euro moved towards the upside, reached our confirmation point at 1.0929, and then continued its upwards rise.

But even though the rally seems to have substance and is supported by momentum, and while it fits our big picture view, we’re still not fully convinced that a continuation of the uptrend is taking place. We’d like to see a completed 5-wave movement and a break above 1.1062 before we have full confidence of this count.

If price makes a new low, we’re going to have to seriously reconsider our entire view. With a complete 5-wave moment towards the downside, it would be logical to assume that the much larger downtrend is back in effect. But let’s not jump to conclusions too early, and wait until enough evidence presents itself for this possibility.

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: 1.0819
– Confirmation Point: –
– Upward Target: 1.1016 – 1.1108
– Wave number: Subminuette iii
– Wave structure: Motive
– Wave pattern: Impulse

Elliott Wave chart analysis for the EURUSD for 28th 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 formed another zigzag labeled minute waves a, b and c, and it’s most likely complete.

This count expects the euro to be resume moving towards the upside in minor wave 3. This will be confirmed by movement above 1.1209.

At 1.1440 minor wave 3 would reach 61.8% the length of minor wave 1, then at 1.1609 it would reach 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. Once price reaches our confirmation point, we may raise the invalidation point to the end of minor wave 2, which currently stands at 1.0819.

Main Hourly Wave Count

This count sees that minor wave 2 is forming a zigzag labeled minute waves a, b and c.

Minute wave b formed a double combination labeled minuette waves (w), (x) and (y), retracing 38.2% of minute wave a.

Minute wave c formed an impulse, labeled minuette waves (i) through (v), coming only 15 pips short of reaching 100% the length of minute wave a.

Within it, minuette wave (iii) formed an impulse labeled subminuette waves i through v, and within that subminuette wave iii formed an extension labeled micro waves 1 through 5.

Minor wave 3 is forming a zigzag labeled minute waves a, b and c.

Within it, minute wave a is forming an impulse labeled minuette waves (i) through (v).

Within in, minuette wave (i) is most likely forming an impulse labeled subminuette waves i through v.

Subminuette wave ii formed an expanded flat labeled micro waves A, B and C.

This count expects the euro to be moving towards the upside in subminuette wave iii.

At 1.1016 subminuette wave iii would reach 161.8% the length of subminuette wave i, then at 1.1108 it would reach 261.8% of its length.

This wave count is invalidated by movement below 1.0819 as subminuette wave ii may not move beyond the start of subminuette wave i.

5 thoughts on “EURUSD 28th May, 2015”

  1. Tamer,

    reading “we’re still not fully convinced that a continuation of the uptrend is taking place. “, could you please elaborate = what “signs” do you see/are missing so that you are not fully confident?

    Thx always/Kind Regards
    Fran

    1. Great question (as always), Fran. Here’s my thinking on this:

      Basically, I don’t trust diagonals of the (3-3-3-3-3) variety until they’re complete and the movement that follows them confirms that they are indeed part of the larger trend. This is because a “triple zigzag” would unfold in the exact same way, so there’s always room for confusion there.

      In addition, if price makes a new low, then the A-B-C (in pink) would form a very nice and strong 5-wave impulse, indicating that the trend is actually down. So until I see a decisive move upwards, I think it’s more cautious to keep our doubts 🙂

  2. Raymond Chong

    Tamer, you should have retained the Bearish count as Alternative . That says EURO has not done Black 5 yet in the Daily count , and the whole reversal rally is corrective, not impulsive . That will give us a chance to decide for ourselves . In EW , there should be Alternative becos of its flexibility, especially at turning points .
    In the Bearish count , let me suggest 2 possibilities now on the Daily chart.
    (i) The first red ( abc) Up has ended but it is not a 1 as indicated . This means EURO is going straight Down now impulsively.
    (ii) Should the Greece debt be resolved next week with another kick of the can down the road , the EURO will reverse Up and the first red ( abc) morph into ( abcde) . From the ( e), Up , it will still go Down . What do you think of these two ideas , both expecting new Lows for the EURO going down to its Black 5 ? Regards , Raymond

    1. Hi Raymond,

      It’s interesting that you posted this now, because I was just about to swap the daily counts (i.e., putting the bearish view as the main count).

      I’ve been studying a number of markets lately, particularly the USD Index, as well as taking a closer look at weekly subdivisions, and I’m starting to finding it much more likely that indeed we still have one final leg downwards in EURUSD.

      I hope you’ll take a look at the final count (which I’ll publish in a minute) and let me know what you think.

      All the best,
      Tamer

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