Tomorrow's Prices Today
Instead of continuing upwards as expected, the euro declined 14 pips below the projected support at 1.1223.
But despite the minor decline in price, momentum has been showing an increasing bullish bias, often indicative of a impending change in price trend.
Cable has continued to score lower lows for the move, more in line with the idea that a top is in place. Whether that top is an interim or significant top, remains to be seen.
On the other hand, the most recent decline leaves the bullish count on thin ice. A drop below its invalidation point would further favor the bearish outlook.
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As expected the euro moved toward the downside and came 3 pips short of reaching our first target.
At the moment, all the indications suggest that the current decline, while possibly incomplete, definitely should be nearing its end.
Instead of making another, rather limited high as expected, the euro spent the day in a steady decline of about 70 pips. The updated daily and hourly charts attempt to make sense of this move and forecast its targets.
Cable’s dip — one pip below the bullish count’s invalidation point — invalidates the bullish count, However, the lack of downside follow-through leaves GBPUSD vulnerable to higher highs. Therefore, I am modifying the bullish count to reflect the most recent price action.
On the other hand, we want to see an impulsive decline to suggest that the uptrend has run its course. It would take a solid evidence to ditch the bullish outlook and embrace the bearish interpretation.
As expected the euro moved toward the upside and is inching closer and closer to our first target.
The count on the hourly chart hasn’t been confirmed yet, but it’s still the most fitting for the developing pattern.
As expected the euro continued moving toward the downside, reached our first target, and came 7 pips short of reaching our second target.
Now a pattern has emerged which, while not textbook-perfect, is clear enough to be labeled and fitting enough to suggest the form of the larger movement.
Apparently it’s one of those streaks when the euro simply refuses to fulfill basic expectations, as today prices declines a little over 100 pips, wiping out all of its gains from the day before.
I’ve updated the hourly chart to reflect a new count, but please do treat it tentatively for the time being. We need to see a clear 5-wave movement toward the downside before we can have confidence in this new count.
Cable continues to drift lower, casting further doubt on the bullish outlook.
As always, we will wait for either count’s confirmation point to be reached to determine the highly probable count.
Having expected that the euro will move a bit toward the upside, I’ll be the first to admit I never thought it could perform such an impressive rally. Then again, the euro was never a market to shy away from surprising its participants.
This advance forces a different count for the entire movement, raising its targets overall, but not changing its general outlook by much.
