As expected the euro moved helplessly towards the downside and is now only 39 pips short of reaching our first target. And now the market is in one of those “decision” points…
On one hand, price is right around a cluster of support levels, in terms of both actual price and wave pattern, so it’s very likely that the downwards potential is limited.
On the other hand, we don’t want to go too early against the prevailing trend until we have solid evidence of a trend reversal, especially since we may actually be in the very early stages of a very strong downtrend.
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: 1.1616 – 1.0525
– Confirmation Point: 1.1239
– Upwards Target: 1.1295
– Wave number: Intermediate (B)
– Wave structure: Corrective
– Wave pattern: Contracting Triangle
Weekly Alternate Count
– Invalidation Point: 1.1239
– Confirmation Point: 1.0525
– Downwards Target: 0.9830 – 0.9056
– Wave number: Intermediate (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) is forming a contracting triangle labeled blue waves A through E.
Main Daily Chart Wave Count
blue wave D is unfolding as a double zigzag labeled pink waves w, x and y.
Within it, pink wave y is forming a zigzag labeled green waves (a), (b) and (c).
Within it, green wave (b) formed a running triangle labeled orange waves a through e, retracing nearly 50% of green wave (a).
Green wave (c) is forming an impulse, reaching over 100% the length of green wave (a). It should be very near completion as it nears several support levels, since at 1.0931 pink wave y would reach 61.8% the length pink wave w, then at 1.0813 it would reach 78.6% of its length.
This count expects the euro soon to move towards the upside in blue wave E to complete black wave (B). This will be confirmed by movement above 1.1239.
At 1.1295 black wave (B) would retrace 23.6% of black wave (A). This is currently the only systematic target available, but we’ll have more concrete targets for blue wave E as soon as blue wave D is complete.
This wave count is invalidated by movement above 1.1616 as blue wave E in this contracting triangle may not move beyond the start of blue wave D.
Alternate Daily Chart Wave Count
This alternate daily count sees that black wave (B) is complete and black wave (C) is unfolding.
Black wave (B) formed a contracting triangle labeled blue waves A through E, retracing very nearly 23.6% of black wave (A).
Within it, blue wave E itself formed a contracting/barrier triangle labeled minute waves a through e.
Black wave (C) is likely forming an impulse labeled blue waves 1 through 5.
This count expects the euro to move towards the downside in black wave (C). This will be confirmed by movement below 1.0525.
At 0.9830 maroon wave (Y) would reach 100% the length of maroon wave (X), then at 0.9056 black wave (C) would reach 61.8% the length of black wave (A).
This wave count is invalidated by movement above 1.1239 as blue wave 2 may not move beyond the start of blue wave 1.