EURUSD Weekly Technical Analysis — September 18th, 2017

After making a very slight new high, the market spent this last week moving downward. And just before it touched the previous low, it started moving again toward the upside.

This all fits nicely within our primary count from last week. But this decline seems a little too strong to be the fourth wave of the ending diagonal I originally assumed was unfolding. A better-fitting count is that a running/barrier triangle is unfolding in the fourth wave position of one larger degree.

On the other hand, this larger-degree fourth wave may very easily turn out to be a more complex correction, possibly a triple combination or some variation of a flat. There’s really no point in trying to cover every possible variation of the correction, so this week I’m going to focus on the one most likely count, but I’ll keep the invalidation point at a more lenient position to allow for the other possibilities.

Unfortunately, I can’t present solid targets for the upside until the triangle is complete. But at least we know that, once the triangle is complete, price will invariably exceed its highest point.

Weekly Main Count
– Invalidation Point: 1.0906
– Confirmation Point: 1.2092
– Upwards Target: 1.2092
– Wave number: Minute v
– 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 toward the upside in maroon wave B, which is forming an expanded flat labeled black waves A, B and C.

Black wave (C) is forming an impulse labeled blue waves 1 through 5.

Blue wave 3 is forming an impulse labeled pink waves i through v.

Main Daily Wave Count

Pink wave iii formed a very strong impulse labeled green waves (i) through (v).

Pink wave iv is most likely forming a running contracting triangle labeled green waves (a) through (e).

Green waves (a), (b) and (c) are most likely complete.

If this triangle scenario is correct, then the market should find support at the low of green wave (c) at 1.1837.

This count expects the euro finally to continue moving toward the upside in pink wave v to complete blue wave 3.

At 1.2092 pink wave v would reach the high of the previous green wave (b), then at 1.2150 it would reach the approximate length of the previous green wave (b) — which was the largest segment of the triangle. These are best-fit targets at this point, and they’ll be updated once pink wave iv is confirmed to be complete.

This wave count is invalidated by movement below 1.1837 as green wave (e) of this contracting triangle may not move beyond the start of green wave (d). However, pink wave iv itself would be invalidated only by movement below 1.0906 as it may not enter the price territory of pink wave i.

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