EURUSD - One More Rise Before the Fall

The euro had a deceptively active week, where it lost over 200 pips. We say it’s “deceptive” because, while it looks like an impulsive decline, it’s actually much more likely to be a correction, particularly since it’s yet to reach our invalidation point.

Over the weekend, we had a chance to review our counts and make minor modifications to some of the wave labels. This doesn’t affect our outlook or previous expectations in any way — it just provides a more fitting count for the wave subdivisions.

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

6-Hour Main Count

– Invalidation Point: 1.3504
– Confirmation Point: –
– Upwards Target : 1.2960 – 1.3001
– Wave number: Minute y
– Wave structure: Corrective
– Wave pattern: Zigzag or Flat

Main 6-Hour Wave Count

The bigger picture sees the euro moving downwards in intermediate wave (A), which is forming an impulse labeled minor waves 1 through 5.

Minor wave 3 formed an impulse labeled minute wave i through v, and has reached nearly 261.8% the length of minor wave 1.

Within it, minute wave v unfolded as an impulse labeled minuette waves (i) through (v), well exceeding 100% the length of minute wave i, and coming close to reaching 100% the length of minute wave iii.

Within it, minuette wave (i) formed a leading diagonal labeled subminuette waves i through v.

Minuette wave (iii) formed an impulse labeled subminuette waves i through v, exceeding 161.8% the length of minuette wave (i).

Minuette wave (iv) retraced 38.2% of minuette wave (iii).

Minuette wave (v) has reached 100% the length of minuette wave (i), driving minor wave 3 to come very close to reaching 261.8% the length of minor wave 1.

Minor wave 4 is probably unfolding as a double combination labeled minute waves w, x and y.

Minute wave w formed a zigzag labeled minuette waves (a), (b) and (c), where minuette wave (b) formed a running triangle labeled subminuette waves a through e, and minuette wave (c) reaching 161.8% the length of minuette wave (a).

Minute wave x formed a double zigzag labeled minuette waves (w), (x) and (y), retracing over 61.8% of minute wave w.

This count expects the euro to make one more upwards push in minute wave y to complete minor wave 4.

The MACD indicator supports this count by showing a bullish crossover.

At 1.2960 minor wave 4 would retrace 38.2% of minor wave 3, then at 1.3001 minute wave y would reach 100% the length of minute wave w.

This wave count is invalidated by movement above 1.3504 as minor wave 4 within this impulse may not enter the price territory of minor wave 1. No invalidation point may be placed at the lower end at this point, as the pattern may unfolded as an expanded flat or more complex formation.