After a clearly bearish couple of weeks — not to mention a bearish recent history in general — it’s only natural to assume that the euro has lost the game and the U.S. dollar is back in power.
And yet, our preferred count suggests the euro is about to enter a period of recovery, where it will regain between 300 and 500 pips of its value over the span of several weeks, maybe months.
On the other hand, the possibility that a new downtrend has begun and is here to stay can’t be dismissed, and our alternate count examines the long-term consequences if that happens.
We’re updating our counts to reflect the most recent price action and to present tighter targets and invalidation points.
P.S.: I’m really sorry about the bad audio quality. I accidentally broke the mic right before recording, and I had absolutely no time to replace it.
Weekly Main Count
– Invalidation Point: 1.1616 – 1.0525
– Confirmation Point: 1.1123
– Upwards Target: 1.1295
– Wave number: Intermediate (B)
– Wave structure: Corrective
– Wave pattern: Contracting Triangle
Weekly Alternate Count
– Invalidation Point: 1.1239
– Confirmation Point: 1.0525
– Downwards Target: 0.9830 – 0.9056
– Wave number: Intermediate (C)
– Wave structure: Motive
– Wave pattern: Impulse or Ending Diagonal
Please click on the charts below to enlarge.
Main Weekly Wave Count
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 contracting triangle labeled blue waves A through E.
Main Daily Chart Wave Count
Blue wave D is forming 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 (c) is forming an impulse labeled orange waves i through v, reaching over 161.8% the length of green wave (a), and it should be very near completion.
Within it, orange wave iii formed an extension labeled violet waves 1 through 5 and reached 423.6% the length of orange wave i.
Price is likely to hit a bottom between 1.0813 and 1.0662. At 1.0813 pink wave y would reach 78.6% the length of pink wave w, then at 1.0662 it would reach 100% of its length.
Blue wave E will likely form a zigzag labeled pink waves a, b and c.
This count expects the euro very soon to move towards the upside in blue wave E to complete black wave (B). This will be largely confirmed by movement above 1.1123, although final confirmation will be by movement above 1.1239.
At 1.1295 black wave (B) would retrace 23.6% of black wave (A).
This wave count is invalidated by movement above 1.1616 as blue wave E in this contracting triangle may not move beyond the start of blue wave D. It is also invalidated by movement below 1.0525 as blue wave D may not move beyond the start of blue wave C.
Alternate Daily Chart Wave Count
This alternate daily count sees that black wave (B) is complete and black wave (C) is unfolding.
Black wave (B) formed a contracting triangle labeled blue waves A through E, retracing very nearly 23.6% of black wave (A).
Within it, blue wave E itself formed a contracting/barrier triangle labeled minute waves a through e.
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 count expects the euro to move towards the downside in black wave (C). This will be confirmed by movement below 1.0525, although it already becomes much more probable by movement below 1.0662.
At 0.9830 maroon wave (Y) would reach 100% the length of maroon wave (X), then at 0.9056 black wave (C) would reach 61.8% the length of black wave (A).
This wave count is invalidated by movement above 1.1239 as pink wave ii may not move beyond the start of pink wave i.