If there’s one thing to be said about the recent movements of the euro, it’s that they appear absolutely chaotic. Price hit the invalidation point of our main count, but then it immediately reversed directions and surged upwards.
This is not to say the market action can’t be explained (because it can) — it just means that, due to the increasing complexity of the pattern, the number of possible outcomes is simply huge at this point.
Price is coming up against a very important resistance level. If it remains intact, we can pretty confidently expect a strong downtrend very soon. But if price breaks through this resistance, then chances are we may be headed to an even more complex corrective pattern.
Either way, this is a lousy time to trade without very strict money management.
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: 1.1225 – 1.1337
– Confirmation Point: 1.1303
– Upwards Target: 1.1318 – 1.1327
– Wave number: Micro 5
– Wave structure: Motive
– Wave pattern: Impulse or Ending Diagonal
Elliott Wave chart analysis for the EURUSD for 29th March, 2016. Please click on the charts below to enlarge.
Main Daily Wave Count
The bigger picture sees that the euro had been moving sideways in intermediate wave (B), which formed a contracting triangle labeled minor waves A through E.
Minor waves B, C, D and E each formed a zigzag labeled minute waves a, b and c.
Minor wave E reached exactly 61.8% the length of minor wave C, and it made a slight overshoot above the upper trend line of the triangle, which is typical.
This count expects the euro to start moving towards the downside in intermediate wave (C), which will most likely form an impulse labeled minor waves 1 through 5. This will be initially confirmed by movement below 1.0812, with final confirmation below 1.0516.
At 0.9832 primary wave Y would reach 100% the length of primary wave W, then at 0.9160 intermediate wave (C) would reach 61.8% the length of intermediate wave (A).
This wave count is invalidated by movement above 1.1337 as minor wave 2 of intermediate wave (C) may not move beyond the start of minor wave 1.
Main Hourly Wave Count
This main count sees that minor wave 1 (of intermediate wave (C)) is most likely forming an impulse labeled minute waves i through v.
Within it, minute wave i is most likely forming an impulse labeled minuette waves (i) through (v).
Within it, minuette wave (i) formed a leading diagonal labeled subminuette waves i through v, each forming a zigzag labeled micro waves A, B and C.
Minuette wave (ii) is forming a zigzag labeled subminuette waves a, b and c.
Within it, subminuette wave b formed a double combination labeled micro waves W, X and Y, retracing 38.2% of subminuette wave a.
Subminuette wave c is forming an impulse labeled micro waves 1 through 5.
This count expects the euro to make one final move towards the upside in micro wave 5 to complete subminuette wave c, and therefore minuette wave (ii). This will be confirmed by movement above 1.1303.
At 1.1318 micro wave 5 would reach 61.8% the length of micro wave 1, then at 1.1327 it would reach 78.6% of its length.
This wave count is invalidated by movement below 1.1225 as micro wave 4 of this impulse may not enter the price territory of micro wave 1. It’s also invalidated by movement above 1.1337 as minuette wave (ii) may not move beyond the start of minuette wave (i).
Alternate Daily Wave Count
This alternate daily count sees that minor wave C is actually still unfolding towards the upside as a zigzag labeled minute waves a, b and c.
Within it, minute wave a formed a leading diagonal labeled subminuette waves (i) through (v).
Minute wave b formed a running triangle labeled minuette waves (a) through (e).
Minute wave c is likely forming an impulse labeled minuette waves (i) through (v).
This count expects the euro to be moving towards the upside in minute wave c to complete minor wave C. This will be fully confirmed by movement above 1.1337.
At 1.1393 minute wave c would reach 61.8% the length of minute wave a, then at 1.1600 it would reach 100% of its length.
This wave count is invalidated by movement above 1.1714 as minor wave C may not move beyond the start of minor wave B. It’s also invalidated by movement below 1.1057 as minuette wave (ii) may not move beyond the start of minuette wave (i).