Other than a very slight new low, followed by a small rally that barely reached our initial confirmation point, this had been quite an uneventful day for the euro.
Given this development (or lack thereof) and the fact that momentum is still consistently rising, our main count remains exactly the same, with only a minor modification to the targets.
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: 1.1341
– Confirmation Point: 1.1165 – 1.1193
– Upwards Target: 1.1206 – 1.1258
– Wave number: Micro 2
– Wave structure: Corrective
– Wave pattern: Zigzag, Flat, or Combination
Elliott Wave chart analysis for the EURUSD for 31st 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).
Within it, 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.
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 green wave (a) is forming an impulse labeled orange waves i through v.
Within it, orange wave i formed a leading diagonal labeled violet waves 1 through 5.
Orange wave ii was very swift and brief, retracing exactly 78.6% of orange wave i.
Orange wave iii is forming an impulse labeled violet waves 1 through 5.
Within it, violet wave 1 most likely formed a leading diagonal labeled aqua waves (1) through (5). This diagonal doesn’t have the perfect look, but it fits the wave relationships of a diagonal in that the third wave is shorter than the first, the fourth shorter than the second, and the fifth shorter than the third.
This count expects the euro to move towards the upside in violet wave 2. This will be initially confirmed by movement above 1.1165, and it will be finally confirmed by movement above 1.1193.
The MACD indicator supports this count by showing a consistent series of bullish divergences, where price keeps making lower lows and momentum steadily makes higher lows.
At 1.1206 violet wave 2 would retrace 38.2% of violet wave 1, then at 1.1258 it would retrace 61.8% of its length.
This wave count is invalidated by movement above 1.1341 as violet wave 2 may not move beyond the start of violet wave 1.
Alternate Daily Wave Count
This alternate count sees that pink wave x is forming a triple zigzag labeled green waves (w) through (z).
Within it, green waves (w), first (x), and (y) are complete, and the second green wave (x) may or may not be complete.
This count expects the euro soon to move towards the upside in green wave (z) to complete pink wave x. This will be confirmed by movement above 1.1366.
At 1.1366 green wave (z) would reach the high of green wave (y), 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 1.0952 as it’s virtually unheard of for a second green wave (x) to move beyond the end of the first green wave (x) in a triple zigzag.