After several days of slow but steady decline, the euro suddenly rallied over the past couple of days, retracing most of its recent drop.
Price is coming up against a very important resistance level. If it remains intact, we can pretty confidently expect a strong downtrend very soon. But if price breaks through this resistance, then chances are we may be headed to an even more complex corrective pattern.
We’re updating our counts to reflect the most recent price action and to present tighter targets and invalidation points. And as usual we’ll use each count’s invalidation point as confirmation of the other count.
Weekly Main Count
– Invalidation Point: 1.1337
– Confirmation Point: 1.1057 – 1.0821
– Downwards Target: 0.9832 – 0.9160
– Wave number: Intermediate (C)
– Wave structure: Motive
– Wave pattern: Impulse or Ending Diagonal
Weekly Alternate Count
– Invalidation Point: 1.1714 – 1.1057
– Confirmation Point: 1.1337
– Upwards Target: 1.1393 – 1.1600
– Wave number: Minor C
– Wave structure: Corrective
– Wave pattern: Zigzag
Please click on the charts below to enlarge.
The bigger picture sees that the euro is moving towards the downside in cycle wave x, which is forming a double zigzag labeled primary waves W, X and Y.
Primary wave Y is forming a zigzag labeled intermediate waves (A), (B) and (C).
Intermediate wave (A) formed an impulse labeled minor waves 1 through 5.
Within it, minor wave 3 reached 261.8% the length of minor wave 1.
Minor wave 5 extended as an impulse labeled minute waves i through v, reaching 161.8% the length of both minor waves 1 and 3.
Main Weekly Wave Count
This main count sees that the euro had been moving sideways in intermediate wave (B), which formed a contracting triangle labeled minor waves A through E.
Minor waves B, C, D and E each formed a zigzag labeled minute waves a, b and c.
Minor wave E reached exactly 61.8% the length of minor wave C, and it made a slight overshoot above the upper trend line of the triangle, which is typical.
This count expects the euro to start moving towards the downside in intermediate wave (C), which will most likely form an impulse labeled minor waves 1 through 5. This will be initially confirmed by movement below 1.0812, with final confirmation below 1.0516.
At 0.9832 primary wave Y would reach 100% the length of primary wave W, then at 0.9160 intermediate wave (C) would reach 61.8% the length of intermediate wave (A).
This wave count is invalidated by movement above 1.1337 as minor wave 2 of intermediate wave (C) may not move beyond the start of minor wave 1.
Alternate Weekly Wave Count
This alternate count sees that minor wave C is actually still unfolding towards the upside as a zigzag labeled minute waves a, b and c.
Within it, minute wave a formed a leading diagonal labeled subminuette waves (i) through (v).
Minute wave b formed a running triangle labeled minuette waves (a) through (e).
Minute wave c is likely forming an impulse labeled minuette waves (i) through (v).
This count expects the euro to be moving towards the upside in minute wave c to complete minor wave C. This will be fully confirmed by movement above 1.1337.
At 1.1393 minute wave c would reach 61.8% the length of minute wave a, then at 1.1600 it would reach 100% of its length.
This wave count is invalidated by movement above 1.1714 as minor wave C may not move beyond the start of minor wave B. It’s also invalidated by movement below 1.1057 as minuette wave (ii) may not move beyond the start of minuette wave (i).