By moving below 1.0639, the market invalidated our main count and set our focus on the alternate. And as expected by the alternate count, the euro moved towards the downside, reached both of our targets, and exceeded the second by 19 pips.
With this new development, it’s time to introduce a new alternate count that discusses the possibility of downtrend continuation. I was hoping to keep this count out of sight to make matters more focused, but it’s now become necessary to keep it in mind.
We’re updating our counts to reflect the most recent price action and to present tighter targets and invalidation points whenever possible.
By movement above 1.0686 EURUSD would be expected to find resistance between 1.0731 and 1.0835, while it remains above 1.0518. But by movement below 1.0518 EURUSD would be expected to find support between 1.0443 and 1.0293, while it remains below 1.0686.
Hourly Main Count
– Invalidation Point: 1.0518
– Confirmation Point: 1.0686
– Upwards Target: 1.0731 – 1.0835
– Wave number: Minute c
– Wave structure: Motive
– Wave pattern: Impulse
Hourly Alternate Count
– Invalidation Point: 1.0686
– Confirmation Point: 1.0518
– Downwards Target: 1.0443 – 1.0293
– Wave number: Minute v
– Wave structure: Motive
– Wave pattern: Impulse or Ending Diagonal
Elliott Wave chart analysis for the EURUSD for 28th November, 2016. Please click on the charts below to enlarge.
Main Daily Wave Count
The bigger picture sees that black wave (C) is likely forming an impulse labeled blue waves 1 through 5.
This count expects the euro to be moving towards the upside in blue wave 2.
At 1.0816 blue wave 2 would retrace 38.2% of blue wave 1, then at 1.1001 it would retrace 61.8% of its length.
This wave count is invalidated by movement above 1.1300 as blue wave 2 may not move beyond the start of blue wave 1.
Main Hourly Wave Count
This main count sees that blue wave 2 is likely forming a zigzag labeled pink waves a, b and c.
Within it, pink wave a formed a leading diagonal labeled green waves (i) through (v).
Pink wave b formed a zigzag labeled orange waves a, b and c. This merits a few more words…
It’s unusual for corrections to be so short, especially in relation to the preceding motive wave, so normally I’d assume that pink wave b is still in the process of forming a more complex type of correction (most likely a flat or a triangle). But the market tends to be unstable and behave differently after very strong moves (such as the 700-pip downtrend we recently witnessed), so I’m going to play the situation by ear and assume pink wave b is complete, seeing it’s fulfilled the minimum requirements of a correction.
This count expects the euro to continue moving towards the upside in pink wave c to complete blue wave 2. This will be largely confirmed by movement above 1.0686.
At 1.0731 pink wave c would reach 100% the length of pink wave a, then at 1.0835 it would reach 161.8% of its length.
This wave count is invalidated by movement below 1.0518 as pink wave b of this zigzag may not move beyond the start of pink wave a. Once price moves above our confirmation point, we may raise the invalidation point to the end of pink wave b, which currently stands at 1.0563.
Alternate Hourly Wave Count
This alternate count sees that blue wave 1 is still unfolding towards the downside.
Within it, pink wave iv formed an expanded flat labeled green waves (a), (b) and (c).
Within it, green wave (a) formed a double zigzag labeled orange waves w, x and y.
Green wave (b) formed a zigzag labeled orange waves a, b and c, retracing nearly 161.8% of green wave (a).
Green wave (c) formed an ending diagonal labeled oranges i through v, reaching nearly twice the length of green wave (a).
Pink wave v is forming either an impulse or an ending diagonal labeled green waves (i) through (v).
This count expects the euro to start moving towards the downside in pink wave v to complete blue wave 1. This will be confirmed by movement below 1.0518.
This count has a lower probability because pink wave iv is so extremely long in comparison to pink wave ii of the same impulse, making the entire pattern have a very atypical look.
At 1.0443 pink wave v would reach 61.8% the length of pink wave iii, then at 1.0293 it would reach 100% of its length.
This wave count is invalidated by movement above 1.0686 as green wave (ii) may not move beyond the start of green wave (i).