EURUSD 24th February, 2016

The market favored our alternate count as it continued moving towards the downside to make another slight new low, coming 6 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 a possible modification to the count that allows for one final decline to complete a larger-degree 5-wave impulse — but only a very limited decline, as we’ll explain in a moment.

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 – 1.0957
– Confirmation Point: 1.1071
– Upwards Target: 1.1094 – 1.1149
– Wave number: Subminuette iii
– Wave structure: Motive
– Wave pattern: Impulse

Hourly Alternate Count
– Invalidation Point: 1.1071 – 1.0866
– Confirmation Point: 1.0957
– Downwards Target: 1.0935 – 1.0905
– Wave number: Minuette (v)
– Wave structure: Motive
– Wave pattern: Impulse or Ending Diagonal

Elliott Wave chart analysis for the EURUSD for 24th 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) retraced about 23.6% of minuette wave (a).

Minuette wave (c) formed an impulse labeled subminuette waves i through v, reaching about 61.8% the length of minuette wave (a).

Within it, subminuette waves iii reached about 261.8% the length of subminuette wave i.

Subminuette wave v reached a little over 100% the length of subminuette wave i.

Minute wave x maybe forming a zigzag labeled minuette waves (a), (b) and (c).

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

This count expects the euro to continue moving towards the upside in subminuette wave iii. This will be confirmed by movement above 1.1071.

The MACD indicator supports this count by showing a series of bullish divergences between the ends of fifth and third waves.

At 1.1094 subminuette wave iii would reach 100% the length of subminuette wave i, then at 1.1149 it would reach 161.8% 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 1.0957 as subminuette wave ii may not move beyond the start of subminuette wave i.

Alternate Hourly Wave Count

This main count sees that minor wave D 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 it, minuette wave (iii) reached less than 61.8% the length of minuette wave (i). This assigns this count a very low probability, and it also dictates that minuette wave (v) must be shorter than minuette wave (iii) for this count to remain valid.

This count expects the euro to continue moving towards the downside in minuette wave (v) to complete minute wave a. This will be confirmed by movement below 1.0957.

At 1.0935 minuette wave (v) would reach 61.8% the length of minuette wave (iii), then at 1.0905 it would reach 78.6% of its length.

This wave count is invalidated by movement above 1.1071 as minuette wave (iv) of this impulse may not enter the price territory of minuette wave (i). It’s also invalidated by movement below 1.0866 as minuette wave (iii) may not be the shortest among minuette waves (i), (iii) and (v).

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