As expected the euro continued moving towards the downside to make a slight new low, coming 5 pips short of reaching our first target.
It’s highly likely that this short-term 5-wave downtrend is now complete, and so our main count sees that an upwards correction is right about to take place. But there’s another almost-identical count that allows for one final decline to complete the 5-wave impulse.
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: 1.1376 – 1.0990
– Confirmation Point: 1.1058
– Upwards Target: 1.1137 – 1.1229
– Wave number: Minute x
– Wave structure: Corrective
– Wave pattern: Zigzag, Flat, Triangle, or Combination
Hourly Alternate Count
– Invalidation Point: 1.1077
– Confirmation Point: 1.0990
– Downwards Target: 1.0951 – 1.0834
– Wave number: Minuette (c)
– Wave structure: Motive
– Wave pattern: Impulse
Elliott Wave chart analysis for the EURUSD for 23rd February, 2016. Please click on the charts below to enlarge.
Main Daily Wave Count
The bigger picture sees that the euro is still moving sideways in intermediate wave (B), which is likely forming a contracting triangle labeled minor waves A through E.
Minor wave A formed a double zigzag labeled minute waves w, x and y.
Minor wave B formed a zigzag labeled minute waves a, b and c, retracing 95% of minor wave A.
Minor wave C formed a zigzag labeled minute waves a, b and c, retracing close to 78.6% of minor wave B. It’s either complete or near completion.
This count expects the euro to be moving towards the downside in minute waves w, x and y to complete minor wave D.
At 1.0780 minor wave D would reach 50% the length of minor wave B, then at 1.0639 it would reach 61.8% of its length.
This wave count is invalidated by movement above 1.1376 as minute wave x of minor wave C may not move beyond the start of minute wave w. It’s also invalidated by movement below 1.0525 as minor wave D may not move beyond the start of minor wave C.
Main Hourly Wave Count
This main count sees that minor wave D is forming a double zigzag labeled minute waves w, x and y.
Within it, minute wave w formed a zigzag labeled minuette waves (a), (b) and (c), and it’s now complete.
Within it, minuette wave (a) formed a leading diagonal labeled subminuette waves i through v, each forming a zigzag labeled micro waves A, B and C.
Minuette wave (b) formed a running flat labeled subminuette waves a, b and c, retracing about 23.6% of minuette wave (a).
Minuette wave (c) formed an impulse labeled subminuette waves i through v.
Within it, subminuette waves iii reached well over 261.8% the length of subminuette wave i.
Subminuette wave v reached 61.8% the length of subminuette wave iii.
This count expects the euro to start moving towards the upside in minute wave x. This will be confirmed by movement above 1.1058.
The MACD indicator supports this count by showing a bullish divergence between the ends of subminuette waves v and iii.
At 1.1137 minute wave x would retrace 38.2% of minute wave w, then at 1.1229 it would retrace 61.8% of its length.
This wave count is invalidated by movement above 1.1376 as minute wave x of minor wave C may not move beyond the start of minute wave w. It’s also invalidated by movement below 1.0990 as a second wave may not move beyond the start of the first wave.
Alternate Hourly Wave Count
This alternate count sees that minuette wave (c) of minute wave w is still unfolding towards the downside.
Within it, subminuette wave iii formed an impulse labeled micro waves 1 through 5.
This count expects the euro to continue moving towards the downside in subminuette wave v, to complete minuette wave (c), and therefore minute wave w. This will be confirmed by movement below 1.0990.
At 1.0951 minuette wave (c) would reach 61.8% the length of minuette wave (a), then at 1.0834 it would reach 100% of its length.
This wave count is invalidated by movement above 1.1077 as subminuette wave iv of this impulse may not enter the price territory of subminuette wave i.