EURUSD: A Good Week for a Decline?

It was a slow and uneventful day for the euro, as price moved towards the upside (as expected), although its movement came short of our expected targets.

Considering the short span of this movement, as well as its finer details on the hourly chart (which we cover daily in our premium service), it now seems more likely that price still hasn’t finished its medium-term downtrend.

We’re updating our counts to reflect the most recent price action and to present tighter targets and invalidation points.

Weekly Main Count
– Invalidation Point: 1.1495
– Confirmation Point: 1.0674
– Downwards Target: 1.0473
– Wave number: Minor 3
– Wave structure: Motive
– Wave pattern: Impulse

Please click on the charts below to enlarge.

Big Picture

The bigger picture sees that the euro is moving towards the downside in cycle wave x, which is forming a double zigzag labeled primary waves W, X and Y.

Primary wave Y is forming a zigzag labeled intermediate waves (A), (B) and (C).

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

Within it, minor wave 3 reached 261.8% the length of minor wave 1.

Minor wave 5 extended as an impulse labeled minute waves i through v, reaching 161.8% the length of both minor waves 1 and 3.

Intermediate wave (B) formed a double zigzag labeled minor waves W, X and Y, retracing a little less than 38.2% of intermediate wave (A).

Intermediate wave (C) is most likely forming an impulse labeled minor waves 1 through 5, which will complete primary wave Y, and therefore cycle wave x. This will be confirmed by movement below 1.0462.

The MACD indicator supports this count by showing a bearish reversal, immediately after touching the zero-line.

At 0.9830 primary wave Y would reach 100% the length of primary wave W, then at 0.9536 intermediate wave (C) would reach 61.8% the length of intermediate wave (A).

This wave count is invalidated by movement above 1.1718 as minor wave 2 may not move beyond the start of minor wave 1.

Main Weekly Wave Count

The main count sees that intermediate wave (C) is most likely forming an impulse labeled minor waves 1 through 5.

Within it, minor wave 2 formed a double combination labeled minute waves w, x and y, each forming a zigzag labeled minuette waves (a), (b) and (c), retracing a bit over 61.8% of minor wave 1.

Minor wave 3 is forming an impulse labeled minute waves i through v.

Within it, minute wave iii reached twice the length of minute wave i.

Minute wave iv retraced 23.6% of minute wave iii.

This count expects the euro to continue moving towards the downside in minute wave v to complete minor wave 3. This will be somewhat confirmed by movement above 1.0674.

At 1.0473 minor wave 3 would reach 161.8% the length of minor wave 1.

This wave count is invalidated by movement above 1.1495 as this is the start of minor wave 3.

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