It’s been a fairly uneventful week since our last weekly analysis (which you can click here to review), leaving our counts almost exactly the same as they were.
If you’ve been following our premium daily analysis, you’re well aware of how complex and convoluted the market movement has been throughout that period. This is all quite typical for such a sideways correction, but it does take its toll on your nerves.
The good news is that, according to our latest revision, we’re now in the final stage of this year-long correction. We’re anticipating one more corrective rally over the coming 4-6 weeks, which is more than enough time for us to prepare for an explosive decline afterwards.
We’re updating our counts to reflect the most recent price action and to present tighter targets and invalidation points.
Weekly Main Count
– Invalidation Point: 1.0821
– Confirmation Point: 1.1446 – 1.1616
– Upwards Target: 1.1671 – 1.1805
– Wave number: Minute v
– Wave structure: Actionary Corrective
– Wave pattern: Zigzag
Weekly Alternate Count
– Invalidation Point: 1.1616 – 1.0525
– Confirmation Point: –
– Downwards Target: 1.0879 – 1.0679
– Wave number: Minor D
– Wave structure: Corrective
– Wave pattern: Zigzag
Please click on the charts below to enlarge.
The bigger picture sees that the euro is moving towards the downside in teal wave x, which is forming a double zigzag labeled maroon waves W, X and Y.
Maroon wave Y is forming a zigzag labeled black waves (A), (B) and (C).
Black wave (A) formed an impulse labeled blue waves 1 through 5.
Black wave (B) is forming a flat labeled blue waves A, B and C.
Note that we previously thought that black wave (B) was actually forming a triangle, which is still a possibility covered by our alternate count. However, since the momentum of blue wave C is already higher than it was at the end of blue wave A, this shifts the probability in favor of our new main count.
Blue wave B retraced exactly 95% of blue wave A, fulfilling all the requirements of a flat correction.
Main Weekly Wave Count
This main count sees that blue wave C is forming an ending diagonal labeled pink waves i through v, each forming a zigzag labeled green waves (a), (b) and (c).
Within pink wave iii, green wave (b) retraced exactly 38.2% of green wave (a), and green wave (c) reached exactly 61.8% the length of green wave (a).
Pink wave iv has reached 78.6% the length of pink wave ii, so it’s either complete or very near completion.
This count expects the euro soon to move towards the upside in pink wave v to complete blue wave C, and therefore black wave (B). This will be initially confirmed by movement above 1.1446, with final confirmation above 1.1616.
The MACD indicator is showing a series of bearish divergences, which is not very surprising in a diagonal.
At 1.1671 pink wave v would reach 61.8% the length of pink wave iii, then at 1.1805 it would reach 78.6% of its length.
This wave count is invalidated by movement below 1.0821 as pink wave iv may not move beyond the start of pink wave iii.
Alternate Weekly Wave Count
This alternate daily count sees that black wave (B) is forming a contracting triangle labeled blue waves A through E.
Within it, blue wave C formed a double zigzag labeled pink waves w, x and y.
Within it, pink wave y formed a zigzag labeled green waves (a), (b) and (c).
This count expects the euro to move towards the downside in blue wave D, which is most likely forming a zigzag labeled pink waves a, b and c.
At 1.0879 blue wave D would reach 61.8% the length of blue wave B, then at 1.0679 it would reach 78.6% of its length.
This wave count is invalidated by movement above 1.1616 as pink wave b of blue wave D may not move beyond the start of pink wave a. It’s also invalidated by movement below 1.0525 as blue wave D may not move beyond the start of blue wave C.