As expected the euro moved towards the downside, passing our confirmation point by 20 pips.
This provides strong confirmation that a new medium-term downtrend has begun, and should continue for another week or so. However, there’s still another possibility (although much less likely) that the market is wandering about within an extended flat correction.
We’re studying both possibilities in today’s analysis. But at any rate, both counts expect a similar direction, at least for today.
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: 1.1169
– Confirmation Point: 1.1123
– Upwards Target: 1.1130 – 1.1144
– Wave number: Micro 4
– Wave structure: Corrective
– Wave pattern: Zigzag, Flat, Triangle, or Combination
Hourly Alternate Count
– Invalidation Point: 1.1358
– Confirmation Point: 1.1169
– Upwards Target: 1.1196 – 1.1251
– Wave number: Subminuette c
– Wave structure: Motive
– Wave pattern: Impulse or Ending Diagonal
Elliott Wave chart analysis for the EURUSD for 27th 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).
Green wave (iv) formed a zigzag labeled orange waves a, b and c, retracing a little over 23.6% of green wave (iii).
Green wave (v) is forming an impulse labeled orange waves i through v.
Within it, orange wave i is forming an impulse labeled violet waves 1 through 4.
Within it, violet wave 2 retraced a little over 61.8% of violet wave 1, and violet wave 3 reached twice the length of violet wave 1.
This count expects the euro to move towards the upside in violet wave 4. This will be initially confirmed by movement above 1.1123.
At 1.1130 violet wave 4 would retrace 23.6% of violet wave 3, then at 1.1144 it would retrace 38.2% of its length.
This wave count is invalidated by movement above 1.1169 as violet wave 4 of this impulse may not enter the price territory of violet wave 1.
Alternate Hourly Wave Count
This alternate count sees that green wave (iv) is still unfolding as an expanded flat labeled orange waves a, b and c.
Within it, orange wave a formed a zigzag labeled violet waves A, B and C.
Orange wave b formed a zigzag labeled violet waves A, B and C, retracing 123.6% the length of orange wave a.
This count expects the euro to resume moving towards the upside in orange wave c to complete green wave (iv). This will be initially confirmed by movement above 1.1169, and it will be fully confirmed by movement above 1.1217, although it doesn’t have to reach that high.
At 1.1196 orange wave c would reach 100% the length of orange wave a, then at 1.1251 it would reach 161.8% 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).