EURUSD Weekly Technical Analysis — September 25th, 2017

The market moved generally sideways over this past week, apparently completing the contracting triangle we’ve been tracking in the fourth-wave position of the current uptrend.

My impression is that the triangle is now complete, or at least very near completion, which would place the market in a position for a continuation of the trend. But since triangle are pre-terminal patterns (meaning, they appear in the next-to-last position of a trend), I wouldn’t expect this continuation to be particularly long-lived.

On the other hand, even though the triangle pattern is the most fitting count at this stage, it’s not the only one possible for this correction. We may easily be looking at a more complex type of correction. Our alternate count covers this possibility, and the invalidation point of the main count serves also as a confirmation level for this alternate count.

Weekly Main Count
– Invalidation Point: 1.1837
– Confirmation Point: 1.2036
– Upwards Target: 1.2116 – 1.2274
– Wave number: Minute v
– Wave structure: Motive
– Wave pattern: Impulse or Ending Diagonal

Weekly Alternate Count
– Invalidation Point: 1.2036
– Confirmation Point: 1.1837
– Downwards Target: 1.1789 – 1.636
– Wave number: Minute iv
– Wave structure: Corrective
– Wave pattern: Double Combination

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.

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

Main Daily Wave Count

The main daily count sees that pink wave iv is most likely forming a running triangle labeled green waves (a) through (e). It’s either complete or very near completion.

This count expects the euro to resume moving toward the upside in pink wave v to complete blue wave 3. This will be confirmed by movement above 1.2036.

At 1.2116 pink wave v would reach 61.8% the length of pink wave i, then at 1.2274 it would reach 100% of its length.

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).

Alternate Daily Wave Count

This alternate daily count sees that pink wave iv is forming a double combination labeled green waves (w), (x) and (y).

Green wave (b) either formed a double combination labeled orange waves w, x and y, which would be now complete, or is still forming a contracting triangle that should be very near completion.

This count expects the euro to be moving toward the downside in green wave (c) to complete pink wave iv. This will be confirmed by movement below 1.1837.

At 1.1789 green wave (c) would reach 100% the length of green wave (a), then at 1.1636 it would reach 161.8% of its length.

This wave count is invalidated by movement above 1.2036.

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