The market has been in a sideways consolidation (with a slight downwards bias) over the past week.

This fits nicely with my current main view, which sees the euro rallying in a minor-degree impulsive, where the past week saw its fourth-wave correction. This is very useful because now I can present an objective confirmation point, as well as tighter targets.

From a wave perspective, it’s very difficult to see the upwards movement from 1.0340, despite its apparent strength, as any type of motive wave. In fact, the same remark goes for the entire move since March 2015.

This leads me to believe that perhaps the triangle that started from 1.0462 is not over yet. If anything, it seems to be right in its middle stage. This is not the only possible scenario, but I find it to be the one that best fits all this seemingly chaotic bouncing into a recognizable, structured pattern.

If this is correct, then we can expect several more months of the same confusion and sudden spikes of volatility that we’ve been seeing for the past couple of years. Still, chances are this week and the one that follows will see another small rally to complete the middle stage of this triangle.

We’re updating our counts to reflect the most recent price action and to present tighter targets and invalidation points.

Weekly Main Count
– Invalidation Point: 1.1023
– Confirmation Point: 1.1269
– Upwards Target: 1.1328 – 1.1360
– Wave number: Minor C
– Wave structure: Motive
– Wave pattern: Impulse

Please click on the charts below to enlarge.

Main Weekly Wave Count

The bigger picture sees that the euro is moving sideways in primary wave B, which is forming a running triangle labeled black waves (A) through (E).

Main Daily Chart Wave Count

This count sees that black wave (C) is most likely forming a zigzag labeled blue waves A, B and C.

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

This count expects the euro to move a bit further towards the upside in pink wave v to complete blue wave C, and therefore black wave (C). This will be confirmed by movement above 1.1269.

At 1.1328 black wave (C) would retrace 78.6% of black wave (B), then at 1.1360 blue wave C would reach 161.8% the length of blue wave A.

This wave count is invalidated by movement below 1.1023 as pink wave iv of this impulse may not enter the price territory of pink wave i.

Since my last weekly analysis of the euro and its ongoing struggle with the U.S. dollar, the market has seen significant appreciation in price as well as interesting developments in its pattern.

From a wave perspective, it’s very difficult to see the upwards movement from 1.0340, despite its apparent strength, as any type of motive wave. In fact, the same remark goes for the entire move since March 2015.

This leads me to believe that perhaps the triangle that started from 1.0462 is not over yet. If anything, it seems to be right in its middle stage. This is not the only possible scenario, but I find it to be the one that best fits all this seemingly chaotic bouncing into a recognizable, structured pattern.

If this is correct, then we can expect several more months of the same confusion and sudden spikes of volatility that we’ve been seeing for the past couple of years. Still, chances are this week and the one that follows will see another small rally to complete the middle stage of this triangle.

We’re updating our counts to reflect the most recent price action and to present tighter targets and invalidation points.

Weekly Main Count
– Invalidation Point: 1.1023
– Confirmation Point: 1.1300
– Upwards Target: 1.1393 – 1.1422
– Wave number: Minor C
– Wave structure: Motive
– Wave pattern: Impulse

Please click on the charts below to enlarge.

Main Weekly Wave Count

The bigger picture sees that the euro is moving sideways in primary wave B, which is forming a running triangle labeled black waves (A) through (E).

Main Daily Chart Wave Count

This count sees that black wave (C) is most likely forming a zigzag labeled blue waves A, B and C.

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

So far pink wave iii has just exceeded 100% the length of pink wave i.

This count expects the euro ultimately to move a bit further towards the upside in pink waves iii, iv and v to complete blue wave C, and therefore black wave (C). This will be confirmed by movement above 1.1300.

At 1.1393 blue wave C would reach 161.8% the length of blue wave A, then at 1.1422 black wave (C) would retrace 78.6% of black wave (B).

This wave count is invalidated by movement below 1.1023 as pink wave iv of this impulse may not enter the price territory of pink wave i.

In my last weekly analysis I expected an immediate decline, under an early assumption that the upwards correction was complete. This view has since been invalidated by the 380-pip rally which set a new high for the month.

It’s important to realize that the overall picture is still quite bearish. The entire movement from 1.0340 is clearly overlapping and has an undeniable sideways nature, reaffirming that it’s a counter-trend movement.

After a careful re-examination of all the price data we have so far, I’m convinced that this entire correction is less than two weeks away from completion, although not before it makes one more small high.

We’re updating our counts to reflect the most recent price action and to present tighter targets and invalidation points.

Weekly Main Count
– Invalidation Point: 1.1300 – 1.0570
– Confirmation Point: 1.0951
– Upwards Target: 1.0953 – 1.1058
– Wave number: Minute z
– Wave structure: Corrective
– Wave pattern: Zigzag

Please click on the charts below to enlarge.

Main Weekly Wave Count

The bigger picture sees that the euro is moving towards the downside in a zigzag labeled black waves (A), (B) and (C).

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

Main Daily Chart Wave Count

This count sees that blue wave 2 is forming a triple zigzag labeled pink waves w through z.

Pink wave z is forming a zigzag labeled green waves (a), (b) and (c).

Green wave (a) formed an impulse labeled orange waves i through v. It’s very likely complete.

Judging by the very little data available since the presumed end of green wave (a), I strongly suspect green wave (b) is forming some sort of a flat correction. As such, I expect it to make a shallow retracement of green wave (a), possibly reaching no further than 1.0800.

This count expects the euro ultimately to move towards the upside in green wave (c) to complete pink wave z, and therefore blue wave 2. This will be confirmed by movement above 1.0951.

At 1.0953 pink wave z would reach 78.6% the length of pink wave w, then at 1.1058 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.

By moving below 1.0603, EUR/USD is expected to move down to find support between 1.0441 and 1.0233. The market should remain below 1.0906, and it’s likely to find resistance around 1.0777.

We’re updating our counts to reflect the most recent price action and to present tighter targets and invalidation points.

Weekly Main Count
– Invalidation Point: 1.0906
– Confirmation Point: 1.0603
– Downwards Target: 1.0441 – 1.0233
– Wave number: Minute iii
– Wave structure: Motive
– Wave pattern: Impulse

Please click on the charts below to enlarge.

Main Weekly Wave Count

The bigger picture sees that the euro is moving towards the downside in black wave (C), which is forming an impulse labeled blue waves 1 through 5.

Blue wave 2 formed a double zigzag labeled pink waves w, x and y. It retraced 61.8% of blue wave 1, and it’s most likely complete.

This count expects the euro to moved towards the downside in blue wave 3. This will be confirmed by movement below 1.0340.

At 0.9947 blue wave 3 would reach 100% the length of blue wave 1, then at 0.9354 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.

As price moves below our confirmation point, we may lower the invalidation point to the end of blue wave 2, which currently stands at 1.0906.

Main Daily Chart Wave Count

This count sees that blue wave 3 is forming an impulse labeled pink waves i through v.

Pink wave ii formed a zigzag labeled green waves (a), (b) and (c). It retraced precisely 61.8% of pink wave i, and it’s most likely complete.

This count expects the euro to move towards the downside in pink wave iii. This will be confirmed by movement below 1.603.

At 1.0441 pink wave iii would reach 100% the length of pink wave i, then at 1.0233 it would reach 161.8% of its length.

This wave count is invalidated by movement above 1.0906 as pink wave ii may not move beyond the start of pink wave i.

As price moves below our confirmation point, we may lower the invalidation point to the end of pink wave ii, which currently stands at 1.0777.

The Euro started the new year by attempting to recover some of the 1,000 pips it had lost in the previous two months. And yet, after four weeks of persistence and perseverance, it has managed to recover only a little less than 50% of its losses over that period.

Not only has this rally been weak and choppy, it’s not even carried very well by momentum, which seems to be steadily waning. None of that is a particularly good sign for the Euro.

We’re updating our counts to reflect the most recent price action and to present tighter targets and invalidation points.

Weekly Main Count
– Invalidation Point: 1.0775
– Confirmation Point: 1.0340
– Downwards Target: 0.9815 – 0.9222
– Wave number: Minor 3
– Wave structure: Motive
– Wave pattern: Impulse

Weekly Alternate Count
– Invalidation Point: 1.1300
– Confirmation Point: 1.0775
– Upwards Target: 1.0820 – 1.0933
– Wave number: Minor 2
– Wave structure: Corrective
– Wave pattern: Triple Zigzag

Please click on the charts below to enlarge.

Main Weekly Wave Count

The bigger picture sees that the euro is moving towards the downside in teal wave x, which is forming a double zigzag labeled maroon waves W, X and Y.

Maroon wave Y is forming a zigzag labeled black waves (A), (B) and (C).

Black wave (A) formed an impulse labeled blue waves 1 through 5.

Black wave (B) formed a contracting triangle labeled blue waves A through E, retracing 23.6% of black wave (A).

Main Daily Chart Wave Count

This main count 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 1.0775 as pink wave ii may not move beyond the start of pink wave i.

Alternate Daily Chart Wave Count

This alternate count 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 is forming a triple zigzag labeled pink waves w, y and z.

This count expects the euro to continue moving towards the upside in blue wave 2. This will be confirmed by movement above 1.0775.

At 1.0820 blue wave 2 would retrace 50% of blue wave 1, then at 1.0933 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.

The euro had a relatively bullish week that nonetheless ended on a dangerously bearish note — one that may set the tone for the entire year in 2017.

But before we get to that, I’d like to take this opportunity to wish you a fantastic new year. May all of your plans, wishes and goals come true!

My general view for 2017 has been simple and consistent: the wave pattern strongly suggests that the market is about to experience a monstrous decline, as it heads into the center point of a long-term downtrend that should drag price even below parity within a relatively short period of time.

We’re updating our counts to reflect the most recent price action and to present tighter targets and invalidation points.

Weekly Main Count
– Invalidation Point: 1.0874
– Confirmation Point: 1.0352
– Downwards Target: 1.0131 – 0.9809
– Wave number: Minute iii
– Wave structure: Motive
– Wave pattern: Impulse

Weekly Alternate Count
– Invalidation Point: 1.1300 – 1.0499
– Confirmation Point: –
– Upwards Target: 1.0709 – 1.0929
– Wave number: Minute c
– Wave structure: Motive
– Wave pattern: Impulse

Please click on the charts below to enlarge.

Main Weekly Wave Count

The bigger picture sees that the euro is moving towards the downside in teal wave x, which is forming a double zigzag labeled maroon waves W, X and Y.

Maroon wave Y is forming a zigzag labeled black waves (A), (B) and (C).

Black wave (A) formed an impulse labeled blue waves 1 through 5.

Black wave (B) formed a contracting triangle labeled blue waves A through E, retracing 23.6% of black wave (A).

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

Main Daily Chart Wave Count

This main count sees blue wave 1 formed a very strong impulse of almost 800 pips.

Blue wave 2 formed a double combination labeled pink waves w, x and y, retracing nearly 50% of blue wave 1.

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

Within it, pink wave ii formed a zigzag labeled green waves (a), (b) and (c), retracing nearly 61.8% of pink wave i.

Green wave (c) of pink wave ii ended with a very clear “shooting star” candlestick bar, which is typically a very reliable bearish signal.

This count expects the euro to resume moving towards the downside in pink wave iii. This will be highly confirmed by movement below 1.0352.

At 1.0131 pink wave iii would reach 100% the length of pink wave i, then at 0.9809 it would reach 161.8% of its length.

This wave count is invalidated by movement above 1.0874 as pink wave ii may not move beyond the start of pink wave i. Once price moves below our confirmation point, we may lower the invalidation point to the end of pink wave ii, which currently stands at 1.0654.

Alternate Daily Chart Wave Count

This alternate daily count sees that blue wave 2 is forming an expanded flat labeled pink waves a, b and c.

Within it, pink wave c seems most likely to be forming an impulse labeled green waves (i) through (v).

This count expects the euro to continue moving towards the upside in pink wave c to complete blue wave 2.

At 1.0709 pink wave c would reach 100% the length of pink wave a, then at 1.0929 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. It’s also invalidated by movement below 1.0499 as green wave (iv) of this impulse may not enter the price territory of green wave (i).

Over the past week, as we moved further along the holiday season, the market slowly swang sideways to retrace about 50% of its previous decline from 1.0670.

That in itself isn’t particularly interesting. But the wave pattern strongly suggests that the market is about to experience a monstrous decline, as it heads into the center point of a long-term bearish pattern that should drag price even below parity within a relatively short period of time.

We’re updating our counts to reflect the most recent price action and to present tighter targets and invalidation points.

Weekly Main Count
– Invalidation Point: 1.0670
– Confirmation Point: 1.0366
– Downwards Target: 1.0105 – 0.9756
– Wave number: Minute iii
– Wave structure: Motive
– Wave pattern: Impulse

Weekly Alternate Count
– Invalidation Point: 1.1300
– Confirmation Point: 1.0670
– Upwards Target: 1.0723 – 1.0943
– Wave number: Minute c
– 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 towards the downside in teal wave x, which is forming a double zigzag labeled maroon waves W, X and Y.

Maroon wave Y is forming a zigzag labeled black waves (A), (B) and (C).

Black wave (A) formed an impulse labeled blue waves 1 through 5.

Black wave (B) formed a contracting triangle labeled blue waves A through E, retracing 23.6% of black wave (A).

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

Main Daily Chart Wave Count

This main count sees blue wave 1 formed a very strong impulse of almost 800 pips.

Blue wave 2 formed a double combination labeled pink waves w, x and y, retracing nearly 50% of blue wave 1.

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

Within it, pink wave iii is forming an extension labeled green waves (i) through (v).

This count expects the euro to continue moving towards the downside in pink wave iii.

At 1.0105 pink wave iii would reach 161.8% the length of pink wave i, then at 0.9756 it would reach 261.8% of its length.

This wave count is invalidated by movement above 1.0670 as green wave (ii) may not move beyond the start of green wave (i).

Alternate Daily Chart Wave Count

This alternate daily count sees that blue wave 2 is forming an expanded flat labeled pink waves a, b and c.

Within it, pink wave a formed a double combination labeled green waves (w), (x) and (y).

Pink wave b formed a zigzag labeled green waves (a), (b) and (c), retracing a little over 138.2% of pink wave a.

This count expects the euro to start moving towards the upside in pink wave c to complete blue wave 2. This will be confirmed by movement above 1.0670.

At 1.0723 pink wave c would reach 100% the length of pink wave a, then at 1.0943 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.

As expected in our last weekly analysis, the market rallied towards our first target at 1.0816 and exceeded it by 58 pips.

From that point, price plummeted for over 500 pips, testing and breaking a bottom that hadn’t been touched since March 2015.

That in itself is an extremely bearish sign, but it doesn’t stop there. The wave pattern strongly suggests that the market is about to experience a monstrous decline, as it heads into the center point of a long-term bearish pattern that should drag price even below parity within a relatively short period of time.

We’re updating our counts to reflect the most recent price action and to present tighter targets and invalidation points.

Weekly Main Count
– Invalidation Point: 1.0670
– Confirmation Point: 1.0366
– Downwards Target: 1.0105 – 0.9756
– Wave number: Minute iii
– Wave structure: Motive
– Wave pattern: Impulse

Weekly Alternate Count
– Invalidation Point: 1.1300
– Confirmation Point: 1.0670
– Upwards Target: 1.0723 – 1.0943
– Wave number: Minute c
– 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 towards the downside in teal wave x, which is forming a double zigzag labeled maroon waves W, X and Y.

Maroon wave Y is forming a zigzag labeled black waves (A), (B) and (C).

Black wave (A) formed an impulse labeled blue waves 1 through 5.

Black wave (B) formed a contracting triangle labeled blue waves A through E, retracing 23.6% of black wave (A).

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

Main Daily Chart Wave Count

This main count sees blue wave 1 formed a very strong impulse of almost 800 pips.

Blue wave 2 formed a double combination labeled pink waves w, x and y, retracing nearly 50% of blue wave 1.

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

Within it, pink wave iii is forming an extension labeled green waves (i) through (v).

This count expects the euro to continue moving towards the downside in pink wave iii.

At 1.0105 pink wave iii would reach 161.8% the length of pink wave i, then at 0.9756 it would reach 261.8% of its length.

This wave count is invalidated by movement above 1.0670 as green wave (ii) may not move beyond the start of green wave (i).

Alternate Daily Chart Wave Count

This alternate daily count sees that blue wave 2 is forming an expanded flat labeled pink waves a, b and c.

Within it, pink wave a formed a double combination labeled green waves (w), (x) and (y).

Pink wave b formed a zigzag labeled green waves (a), (b) and (c), retracing a little over 138.2% of pink wave a.

This count expects the euro to start moving towards the upside in pink wave c to complete blue wave 2. This will be confirmed by movement above 1.0670.

At 1.0723 pink wave c would reach 100% the length of pink wave a, then at 1.0943 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.

In our last weekly analysis, we shared our expectation that the market will begin a massive downtrend, and we suggested that 1.0525 would mark the point of confirmation for this view.

Since then the market plummeted for nearly 800 pips in an impressive, uninterrupted move the likes of which we haven’t seen in nearly two years. The market did reach our confirmation point, exceeded it by only 7 pips, and has been pausing there for a few days.

This may be the last time that the euro has a chance to recover for a very, very long time.

We’re updating our counts to reflect the most recent price action and to present tighter targets and invalidation points.

Weekly Main Count
– Invalidation Point: 1.1300
– Confirmation Point: 1.0686
– Upwards Target: 1.0816 – 1.1001
– Wave number: Minor 2
– Wave structure: Corrective
– Wave pattern: Zigzag, Flat, or Combination

Please click on the charts below to enlarge.

Main Weekly Wave Count

The bigger picture sees that the euro is moving towards the downside in teal wave x, which is forming a double zigzag labeled maroon waves W, X and Y.

Maroon wave Y is forming a zigzag labeled black waves (A), (B) and (C).

Black wave (A) formed an impulse labeled blue waves 1 through 5.

Main Daily Chart Wave Count

This main count sees that black wave (B) formed a contracting triangle labeled blue waves A through E, retracing exactly 23.6% of black wave (A).

Within it, blue wave D formed a double zigzag labeled pink waves w, x and y, reaching 61.8% the length of blue wave B.

Blue wave E formed a zigzag labeled minute waves a, b and c, retracing nearly 61.8% of blue wave D.

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

Within it, blue wave 1 is very likely complete.

This count expects the euro to move towards the upside in blue wave 2. This is already the default count, and it will be further confirmed by movement above 1.0686.

The MACD indicator supports this count by showing a bullish crossover, as well as the histogram bars moving above the zero line.

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.

With the intense drama of the U.S. elections – described by many as the most nerve wracking election in the recent history of the United States – it’s not very surprising that the market has had a couple of very interesting weeks as well.

It began with the euro’s sudden, swift rally of nearly 500 pips, which included the biggest single-day action we’ve seen in several months. This was immediately followed by an even more massive decline that wiped out all of the preceding rally, and then some.

Right now the odds are stacked in favor of the long-term bearish scenario. But it’s still early days to be sure, and there’s a definite possibility that this is nothing more than a whiplash of volatility within a remarkably prolonged consolidation phase. It’s interesting to note that both of these higher-probability counts are ultimately bearish.

We’re focusing this week on discussing the larger picture over the long term, and so our targets reflect this larger timeframe. Hopefully next week there will be enough new data to calculate more useful (and trade-able) targets.

We’re updating our counts to reflect the most recent price action and to present tighter targets and invalidation points.

Weekly Main Count
– Invalidation Point: 1.1300
– Confirmation Point: 1.0525
– Downwards Target: 0.9117 – 0.7768
– Wave number: Intermediate (C)
– Wave structure: Motive
– Wave pattern: Impulse or Ending Diagonal

Weekly Alternate Count
– Invalidation Point: 1.1300 – 1.0525
– Confirmation Point: –
– Downwards Target: 1.0746 – 1.0596
– Wave number: Minute z
– Wave structure: Corrective
– Wave pattern: Zigzag

Please click on the charts below to enlarge.

Main Weekly Wave Count

The bigger picture sees that the euro is moving towards the downside in teal wave x, which is forming a double zigzag labeled maroon waves W, X and Y.

Maroon wave Y is forming a zigzag labeled black waves (A), (B) and (C).

Black wave (A) formed an impulse labeled blue waves 1 through 5.

Main Daily Chart Wave Count

This main count sees that black wave (B) formed a contracting triangle labeled blue waves A through E, retracing exactly 23.6% of black wave (A).

Within it, blue wave D formed a double zigzag labeled pink waves w, x and y, reaching 61.8% the length of blue wave B.

Blue wave E formed a zigzag labeled minute waves a, b and c, retracing nearly 61.8% of blue wave D.

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

Within it, blue wave 1 is likely also forming an impulse labeled pink waves i through v.

This count expects the euro to continue moving towards the downside in black wave (C). This is already the default count, and it will be finally confirmed by movement below 1.0525.

At 0.9117 black wave (C) would reach 61.8% the length of black wave (A), then at 0.7768 it would reach 100% of its length.

This wave count is invalidated by movement above 1.1300 as pink wave ii may not move beyond the start of pink wave i.

Alternate Daily Chart Wave Count

This alternate count sees that blue wave D of black wave (B) is still unfolding as a triple zigzag labeled pink waves w through z.

Within it, pink waves w, x1, y, and x2 are complete.

Pink wave z is forming a zigzag labeled green waves (a), (b) and (c).

This count expects the euro to move towards the downside in pink wave z to complete blue wave D.

At 1.0746 pink wave z would reach 78.6% the length of pink wave w, then at 1.0596 it would reach 100% of its length.

This wave count has a low probability because triangle subwaves are almost never known to form as triple zigzags.

This wave count is invalidated by movement above 1.1300 as green wave (b) of this zigzag may not move beyond the start of green wave (a). It is also invalidated by movement below 1.0525 as blue wave D of this contracting triangle may not move beyond the start of blue wave C.