EURUSD: In Search of a Break-out

Not much happened during this past week, as the euro continued bouncing within a clearly converging range.

This leaves our main count exactly as it was. But due to the complex corrective nature of the most recent movement, we’re changing the alternate count to present a better fit with clearer targets.

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

Weekly Main Count

– Invalidation Point: 1.1460

– Confirmation Point: 1.1087

– Downwards Target: 1.0829 – 1.0438

– Wave number: Minor 3

– Wave structure: Motive

– Wave pattern: Impulse

Weekly Alternate Count

– Invalidation Point: 1.0809

– Confirmation Point: 1.1718

– Upwards Target: 1.1736 – 1.2083

– Wave number: Minor Z

– Wave structure: Corrective

– Wave pattern: Zigzag, or Flat

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.

Intermediate wave (B) formed a double zigzag labeled minor waves W, X and Y, retracing a little less than 38.2% of intermediate wave (A), and it’s most likely complete.

This count expects the euro to be moving towards the downside in intermediate wave (C), which is most likely forming an impulse labeled minor waves 1 through 5. This will be confirmed by movement below 1.0462.

At 0.9830 primary wave Y would reach 100% the length of primary wave W, then at 0.9536 intermediate wave (C) would reach 61.8% the length of intermediate wave (A).

This wave count is invalidated by movement above 1.1718 as minor wave 2 may not move beyond the start of minor wave 1.

Main Weekly Wave Count

The main count sees that within intermediate wave (C), minor wave 1 is complete, and minor wave 2 formed a zigzag labeled minute waves a, b and c, retracing a bit short of 61.8% of minor wave 1.

Minor wave 3 is forming an impulse labeled minute waves i through v.

Within it, minute wave i is complete.

Minute wave ii is most likely still unfolding, but it should be very near completion.

This count expects the euro to continue moving towards the downside in minor wave 3. This will be confirmed by movement below 1.1087.

At 1.0829 minor wave 3 would reach 100% the length of minor wave 1, then at 1.0438 it would reach 161.8% of its length.

This wave count is invalidated by movement above 1.1460 as minute wave ii may not move beyond the start of minute wave i.

Alternate Weekly Wave Count

The alternate count sees that intermediate wave (B) is still unfolding as a triple combination labeled minor waves W through Z.

The pre-final minor wave X formed a triangle labeled minute waves a through e, retracing almost 61.8% of minor wave Y.

This count expects the euro to resume moving towards the upside in minor wave Z to complete intermediate wave (B). This will be confirmed by movement above 1.1718.

At 1.1736 minor wave Z would reach 61.8% the length of minor wave Y, then at 1.2083 it would reach 100% of its length.

This wave count is invalidated by movement below 1.0809 as it’s very unlikely for the second x-wave within a triple combination to move beyond the start of its previous y-wave.