EURUSD: Resistance Is Futile … At Least for the Euro

EUR/USD has been behaving consistently as expected since its recent high at 1.1216.

First, price declined over 400 pips in a fairly impulsive manner, and then it retraced exactly 78.6% of that decline with what looks like a clear upwards double zigzag.

The stage is now set for a new round of impulsive decline, and since we’re expecting a third wave, be prepared for the price action to be strong and swift.

Weekly Main Count

– Invalidation Point: 1.1216
– Confirmation Point: 1.0893 – 1.0809
– Downwards Target: 1.0722 – 1.0470
– Wave number: Minor 3
– Wave structure: Motive
– Wave pattern: Impulse

Please click on the charts below to enlarge.

Main Weekly Wave Count

This count sees that the euro is still moving towards the downside in primary wave C of cycle wave x, which is forming an impulse labeled intermediate waves (1) through (5).

Intermediate wave (4) formed a contracting triangle labeled minor waves A through E, retracing a few pips short of 23.6% of intermediate wave (3).

Intermediate wave (5) is most likely forming an impulse labeled minor waves 1 through 5.

Within it, minor wave 1 formed an impulse labeled minute waves i through v.

Minor wave 2 formed a double zigzag labeled minute waves w, x and y, each forming a zigzag labeled minuette waves (a), (b) and (c). It retraced exactly 78.6% of minor wave 1, and it’s most likely complete.

This count expects the euro to resume moving towards the downside in minor wave 3, which will be forming an impulse labeled minute waves i through v. This will be confirmed by movement below 1.0893, with higher confirmation below 1.0809.

At 1.0722 minor wave 3 would reach 100% the length of minor wave 1, then at 1.0470 it would reach 161.8% of its length.

This wave count is invalidated by movement above 1.1216 as minor wave 2 may not move beyond the start of minor wave 1. Once price reaches our confirmation points, we may lower the invalidation point to the end of minor wave 2, which currently stands at 1.1129.