Instead of making one final (and humble) price high as expected, the euro dropped over a total of 100 pips in 15 hours.
This could very well be the first step of the downtrend we’ve been warning about for quite a while now. We still need to see some solid price confirmation first, but there are several reasons to start planning for it right away.
We’re updating our counts to reflect the most recent price action and to present tighter targets and invalidation points.
Synopsis: By movement below 1.0657, EURUSD would be expected to find support between 1.0637 and 1.0596. The market should find resistance around 1.0711, and it should ultimately remain below 1.0775.
Hourly Main Count
– Invalidation Point: 1.0711 – 1.0775
– Confirmation Point: 1.0657
– Downwards Target: 1.0637 – 1.0596
– Wave number: Subminuette v
– Wave structure: Motive
– Wave pattern: Impulse or Ending Diagonal
Elliott Wave chart analysis for the EURUSD for 26th January, 2017. 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.
Within it, blue wave 1 formed a leading diagonal labeled pink waves i through v.
Blue wave 2 formed a zigzag labeled pink waves a, b and c.
Blue wave 3 is forming an impulse labeled pink waves i through v.
This count expects the euro to move towards the downside in blue wave 3. This will be confirmed by movement below 1.0340.
At 0.9815 blue wave 3 would reach 100% the length of blue wave 1, then at 0.9222 it would reach 161.8% 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.
Once price moves below our confirmation point, we may lower the invalidation point to the end of blue wave 2, which currently stands at 1.0775.
Main Hourly Wave Count
This main hourly count sees that pink wave i is likely forming an impulse labeled green waves (i) through (v).
Within it, green wave (i) is likely forming an impulse labeled orange waves i through v.
Within it, orange wave iii formed a series of extensions, reaching 161.8% the length of orange wave i.
Orange wave iv may be already complete as a very swift zigzag, or it may unfold into a more complex correction.
This count expects the euro to continue moving towards the downside in orange wave v to complete green wave (i). This will be confirmed by movement below 1.0657.
At 1.0637 orange wave v would reach 61.8% the length of orange wave iii, then at 1.0596 it would reach 100% of its length.
This wave count is invalidated by movement above 1.0711 as orange wave iv of this impulse may not enter the price territory of orange wave i.
Any movement above 1.0775 will indicate that blue wave 2 is still unfolding as a more complex correction.