As expected the euro started the day by moving towards the upside to reach our first target, exceeding it by only 3 pips, and then reversing downwards to complete a 5-wave impulse.
The market seems to be in the right position for another fourth-wave correction that should last about 2 days — whether the euro has already begun this correction or is about to, the outcome should remain pretty much the same.
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: 1.1358
– Confirmation Point: 1.1167
– Upwards Target: 1.1204 – 1.1250
– Wave number: Minuette (iv)
– Wave structure: Corrective
– Wave pattern: Zigzag, Flat, Triangle, or Combination
Elliott Wave chart analysis for the EURUSD for 25th May, 2016. Please click on the charts below to enlarge.
Main Daily Wave Count
The bigger picture sees that the euro was moving sideways in black wave (B), which formed a running flat labeled blue waves A, B and C.
Blue wave B retraced exactly 95% of blue wave A, fulfilling the requirement of a flat correction.
Blue wave C formed an ending diagonal labeled pink waves i through v, each forming a zigzag labeled green waves (a), (b) and (c).
This count expects the euro to be moving towards the downside in black wave (C), to complete maroon wave Y, and therefore teal wave x. This will be confirmed by movement below 1.0821.
Black wave (C) is likely forming an impulse labeled blue waves 1 through 5.
Within it, blue wave 1 is likely forming an impulse labeled pink waves i through v.
This wave count is invalidated by movement above 1.1616 as pink wave ii may not move beyond the start of pink wave i.
Main Hourly Wave Count
This main count sees that pink wave i is forming an impulse labeled green waves (i) through (v).
Within it, green wave (iii) formed an impulse labeled orange waves i through v, reaching reasonably over 100% the length of green wave (i).
Within it, orange wave iv formed a zigzag labeled violet waves A, B and C, retracing exactly 38.2% of orange wave iii.
Orange wave v formed an impulse labeled violet waves 1 through 5.
Within it, violet wave 3 reached over 161.8% the length of violet wave 1, and violet wave 4 retraced 23.6% of violet wave 3.
(It’s possible that violet wave 4 is still unfolding as an expanded flat. But since this count differs very slightly from our preferred count, we’re only mentioning it briefly for the time being.)
This count expects the euro to move towards the upside in green wave (iv). This will be confirmed by movement above the most recent high at 1.1167.
At 1.1204 green wave (iv) would retrace 23.6% of green wave (iii), then at 1.1250 it would retrace 38.2% of its length.
This wave count is invalidated by movement above 1.1358 as green wave (iv) may not enter the price territory of green wave (i).
Alternate Daily Wave Count
This alternate daily count sees that blue wave C of black wave (B) is still unfolding as an ending diagonal labeled pink wave i through v.
Within it, pink wave iv retraced 61.8% of pink wave iii, and it’s either complete or very near completion.
This count expects the euro to move towards the upside in pink wave v to complete blue wave C, and therefore black wave (B). This will be confirmed by movement above 1.1616.
At 1.1782 blue wave C would reach 100% the length of blue wave A, then at 1.1811 black wave (B) would retrace 38.2% of black wave (A).
This wave count is invalidated by movement below 1.0821 as pink wave iv may not move beyond the start of pink wave iii.