As expected the euro tumbled towards the downside, reached both of our targets, and exceeded the second target by exactly 7 pips. For those of us who traded based on our confirmation and target points, this locks in about 50 pips of profit.
The market usually follows this type of movement by a small consolidation, then a moderate continuation of the previous trend. This provides a reasonable short-term target on the hourly chart. On the other hand, the bigger picture on the daily chart is still too complex for a definite count, so we’re providing two competing alternatives and waiting for the market to show which one to follow.
We’re updating our counts to reflect the most recent price action and to present tighter targets and invalidation points.
By movement below 1.1149, EURUSD would be expected to find support between 1.1144 and 1.1109, while remaining below 1.1239.
Hourly Main Count
– Invalidation Point: 1.1239
– Confirmation Point: 1.1149
– Downwards Target: 1.1144 – 1.1109
– Wave number: Minuscule
– Wave structure: Motive
– Wave pattern: Impulse or Ending Diagonal
Elliott Wave chart analysis for the EURUSD for 16th September, 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 y is forming a zigzag labeled green waves (a), (b) and (c).
Within it, green wave (b) is most likely forming a flat labeled orange waves a, b and c.
This count expects the euro to continue moving towards the downside in pink wave y over the next couple of weeks.
At 1.0931 pink wave y would reach 61.8% the length of pink wave w, then at 1.0662 it would reach 100% of its length.
This wave count is invalidated by movement above 1.1366 as green wave (b) of this zigzag may not move beyond the start of green wave (a).
Main Hourly Wave Count
This main count sees that green wave (b) is most likely forming a flat labeled orange waves a, b and c.
Within it, orange wave b is forming a double zigzag labeled violet waves W, X and Y.
Within it, violet wave W formed a typical zigzag labeled aqua waves (A), (B) and (C).
Violet wave X formed a triple zigzag labeled aqua waves (W), (Y) and (Z), retracing a bit over 61.8% of violet wave W.
Violet wave Y is forming another zigzag labeled aqua waves (A), (B) and (C).
Within it, aqua wave (C) is forming a strong impulse labeled red waves 1 through 5.
Within it, red waves 1, 2 and 3 are complete.
This count expects the euro to move first sideways or slightly upwards in red wave 4, and then towards the downside in red wave 5. This will be largely confirmed by movement below 1.1149.
At 1.1144 orange wave b would retrace 90% of orange wave a and fulfill the requirement of a flat correction, then at 1.1109 red wave 5 would reach 61.8% the length from the beginning of red wave 1 to the end of red wave 3. (This second target is calculated assuming that red wave 4 would retrace 23.6% of red wave 3 at 1.1173. If red wave 4 ends at a different price point, the target should be adjusted accordingly.)
This wave count is invalidated by movement above 1.1239 as red wave 4 of this impulse may not enter the price territory of red wave 1.
Alternate Daily Wave Count
This alternate daily count sees that pink wave x is forming a flat labeled green waves (a), (b) and (c).
Within it, green waves (a) formed a double zigzag labeled orange waves w, x and y.
Green wave (b) is likely forming a zigzag labeled orange waves a, b and c. It should go all the way down to retrace at least 90% of green wave (a).
This count expects the euro to continue moving towards the upside in pink wave x.
At 1.1348 pink wave x would retrace 61.8% of pink wave w, then at 1.1466 it would retrace 78.6% of its length.
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.