Tomorrow's Prices Today
The euro was pushed further down to retrace just over 90% of its gains over the past week of trading. Price remains above the invalidation point of the main count, however, so there’s no need to look for an alternative.
That said, if price does break below the invalidation point, the alternate count doesn’t expect this break to continue for any significant length of time or to impact the price in any significant negative way.
The most recent decline leaves the bullish outlook on thin ice. We will main the bullish outlook as long as the main count’s invalidation point holds.[View Wave Counts & Charts…]
As expected the euro moved toward the downside, reached our first target, and has come so far within 10 pips of reaching our second target.
This downward move has now fulfilled all the requirements of a second-wave correction. Therefore, whether or not it’s actually complete, it’s reasonable to begin getting prepared for a subsequent rally.
Cable’s advance is in line with the idea that a bottom is in place and that higher highs are in store before resuming the larger degree downtrend.
[View Wave Counts & Charts…]
The euro continued moving upward for another 40 pips, mostly due to the inertia from its most recent rally. But since every action stimulates an appropriate reaction, we should see some form of downward correction very soon.
Cable drifted to lower lows, tagging the middle of the cited target zone before reversing gears. Whether a bottom is in place, remains to be seen.
[View Wave Counts & Charts…]
In a very interesting turn of event, and upon the invalidation of our main daily count, it turned out that the long-term diagonal (which had started all the way back in February 2018) was actually still unfolding.
I had avoided discussing this possibility because I felt it introduced unnecessary complications, but now we’re forced to contend with it. At any rate, even the new main count sees that the most recent dip below 1.1109 to 1.1106 was indeed the end of that diagonal.
It’s worth noting that yesterday saw the strongest daily move in exactly 30 days.
Cable extended its decline and the cited target was reached and exceeded. We will continue to look for lower lows as long as the main hourly count’s invalidation point remains intact.
[View Wave Counts & Charts…]
The recent developments in the euro leave it in a fairly ambiguous situation, despite the presence of several classic signals.
To recap what happened yesterday, price first moved upwards rapidly to reach the initial confirmation point of our main count. Then, immediately upon reaching that point, price bounced back down to retrace nearly 78.6% of the preceding advance. However, this partial retracement took 3 times longer to form than the preceding advance, which is strongly suggestive of a counter-trend move.
On both the hourly and daily charts, momentum shows a clear bullish divergence, suggesting that the declines at both degrees are not technically supported. Additionally, the daily chart just formed a candlestick that is both a spinning top *and* an engulfing pattern, right around the previously established support level at 1.1134.
All of these data points coincide to suggest that the market is very likely at or very near the beginning of a new rally. Nonetheless, this view requires significant confirmation from actual price, which is unlikely to happen in a day or two.
The euro spent the day lazily wigwagging within a 25-pip range. This leaves our most recent count pretty much exactly as it was.
