As expected the euro moved towards the upside, reached our first target, and came less than 1 pip short of our second target.
So far the diagonal count is unfolding very nicely. It’s quite possible that its fourth wave may develop into a more complex correction, but since it’s already met all the criteria for a complete simple correction, it’s logical to build on the information the market has already given us.
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: 1.1297
– Confirmation Point: 1.1271 – 1.1245
– Downwards Target: 1.1229 – 1.1187
– Wave number: Submicro (5)
– Wave structure: Actionary Corrective
– Wave pattern: Zigzag
Elliott Wave chart analysis for the EURUSD for 25th August, 2016. Please click on the charts below to enlarge.
Main Daily Wave Count
The bigger picture sees that the euro is moving sideways in black wave (B), which is forming a contracting triangle labeled blue waves A through E.
Within it, blue wave D is unfolding as a double zigzag labeled pink waves w, x and y.
Within it, pink wave x formed a double zigzag labeled green waves (w), (x) and (y).
Pink wave y is forming a zigzag labeled green waves (a), (b) and (c).
Green wave (a) is forming an impulse labeled orange waves i through v.
This count expects the euro to be moving towards the downside in pink wave y to complete blue wave D. This will be largely confirmed by movement below 1.1234.
At 1.0931 pink wave y would reach 61.8% the length of pink wave w, then at 1.0662 it would reach 100% the length of blue wave B.
This wave count is invalidated by movement above 1.1366 as orange wave ii may not move beyond the start of orange wave i. It’s also invalidated by movement below 1.0525 as blue wave D of a contracting triangle may not move beyond the start of blue wave C.
Main Hourly Wave Count
This main count sees that orange wave i of green wave (a) is forming a leading diagonal labeled violet waves 1 through 5.
Within it, violet waves 1, 2 and 3 each formed a zigzag labeled aqua waves (A), (B) and (C).
Violet wave 4 also formed a zigzag labeled aqua waves (A), (B) and (C), reaching exactly 61.8% the length of violet wave 2. It’s most likely complete.
Violet wave 5 is most likely unfolding as another zigzag labeled aqua waves (A), (B) and (C).
This count expects the euro to move towards the downside in violet wave 5. This will be initially confirmed by movement below 1.1271, and it will be finally confirmed by movement below 1.1245.
At 1.1229 violet wave 5 would reach 61.8% the length of violet wave 3, then at 1.1187 it would reach 100% of its length.
This wave count is invalidated by movement above 1.1297 as aqua wave (B) of violet wave 5 may not move beyond the start of aqua wave (A). If price moves above this point, we’ll assume that violet wave 4 is still unfolding as a more complex correction, provided it remains below the start of violet wave 3.
Alternate Daily Wave Count
This alternate count sees that pink wave x is forming a flat labeled green waves (a), (b) and (c).
Within it, green wave (c) is forming an impulse labeled orange waves i through v.
This count expects the euro to move towards the upside in orange wave v to complete green wave (c), and therefore pink wave x. This will be confirmed by movement above 1.1366.
At 1.1395 green wave (c) would reach 161.8% the length of green wave (a), then at 1.1466 pink wave x would retrace 78.6% of pink wave w.
This wave count is invalidated by movement above 1.1616 as pink wave x of a double zigzag may not move beyond the start of pink wave w. It’s also invalidated by movement below 1.1234 as orange wave iv of an impulse may not enter the price territory of orange wave i.