As expected the euro moved towards the upside, passed our first target, and reached our second target exactly to the pip.
Immediately after reaching that point, the market rejected any further advance and began to push the price down, leading to the formation of a near-textbook shooting star candlestick on the daily chart — a common bearish reversal pattern.
We’re updating our counts to reflect the most recent price action and to present tighter targets and invalidation points.
Synopsis: By moving below 1.0853, EUR/USD is expected to move down to find medium-term support between 1.0809 and 1.0749, while it remains below 1.0906. Price will probably find resistance between 1.0878 and 1.0889.
Hourly Main Count
– Invalidation Point: 1.0906
– Confirmation Point: 1.0853
– Downwards Target: 1.0809 – 1.0749
– Wave number: Minuette (b)
– Wave structure: Corrective
– Wave pattern: Zigzag, Flat, Triangle, or Combination
Elliott Wave chart analysis for the EURUSD for 27th March, 2017. Please click on the charts below to enlarge.
Main Daily Wave Count
The bigger picture on this daily chart sees that black wave (C) is forming an impulse labeled blue waves 1 through 5.
Blue wave 2 is forming a double zigzag labeled pink waves w, x and y.
Pink wave y is forming a zigzag labeled green waves (a), (b) and (c).
Green wave (a) formed an impulse labeled orange waves i through v.
This count expects the euro to continue moving generally towards the upside in pink wave y to complete blue wave 2.
At 1.0878 pink wave y would reach 78.6% the length of pink wave w, then at 1.0983 it would reach 100% 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. It’s also invalidated by movement below 1.0495 as green wave (b) of this zigzag may not move beyond the start of green wave (a).
Main Hourly Wave Count
This main hourly count sees that green wave (b) is now unfolding towards the downside. It may form any corrective pattern, but to take the most logical route, I’ll assume for now that it’s forming a zigzag labeled orange waves a, b and c.
Orange wave a is likely forming an impulse labeled violet waves 1 through 5.
Violet wave 1 formed an impulse labeled aqua waves (1) through (5). It seems to be complete.
Violet wave 2 should make a moderate correction, so the market should find moderate resistance between 1.0878 and 1.0889.
Since this movement is still in its early beginnings, there aren’t enough subdivisions for me to propose immediate targets, so I’ll focus on larger green wave (b) until more data comes in. I expect this green wave (b) to behave similarly to its most recent counterparts, so it will likely be short and shallow.
This count expects the euro to continue moving towards the downside in orange waves a, b and c to complete green wave (b). This will be initially confirmed by movement below 1.0853, and it will be finally confirmed by movement below 1.0839.
At 1.0809 green wave (b) would retrace 23.6% of green wave (a), then at 1.0749 it would retrace 38.2% of its length.
This wave count is invalidated by movement above 1.0906 as violet wave 2 may not move beyond the start of violet wave 1.
This invalidation point comes into effect only after the market reaches at least our first confirmation point. Until then, it’s possible for green wave (a) to still be unfolding upwards.