EURUSD – Preparing for an Explosive Rally?

As expected the euro moved towards the downside to reach our first target and exceed it by 27 pips.

This corrective downwards pattern doesn’t look complete yet — but it’s nearing completion. Our general view is that the euro is soon about to make a new low, which would set the stage for an explosive rally. This change in trend may take place some time this week or possibly early next week.

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: 1.3673
- Confirmation Point: -
- Downwards Target : 1.3794 – 1.3750
- Wave number: Subminuette ii
- Wave structure: Corrective
- Wave pattern: Zigzag, Flat, or Combination

Main 6-Hour Wave Count

The bigger picture sees the euro moving upwards in minute wave iii, within minor wave C, within intermediate wave (Y) of primary wave D.

Minute wave iii is unfolding as an impulse.

Within it, minuette wave (i) formed an impulse labeled subminuette waves i through v.

Minuette wave formed a zigzag labeled subminuette waves a, b and c, which retraced 61.8% of minuette wave (i).

Within it, subminuette wave a formed a leading diagonal labeled micro waves 1 through 5.

Subminuette wave b retraced between 38.2% and 50% of subminuette wave a.

Subminuette wave c reached nearly 61.8% the length of subminuette wave a.

After that, minuette wave (iii) began to subdivide as an impulse labeled subminuette waves i through v.

Subminuette wave i itself formed a very strong impulse and is either complete or near completion.

Subminuette wave ii is likely unfolding as a zigzag labeled micro waves A, B and C.

Micro waves A and B are most probably complete.

This count expects the euro to continue moving downwards in micro wave C to complete subminuette wave ii, before skyrocketing upwards in subminuette wave iii.

The MACD indicator supports this count by showing bearish momentum, as well as a false bullish crossover.

In terms of candlestick analysis, no clear pattern appears at this point, but it’s clear that the bearish bars are much stronger than the bullish ones.

At 1.3794 micro wave C would reach 61.8% the length of micro wave A, then at 1.3750 it would reach 100% of its length.

This wave count is invalidated by movement below 1.3673 as subminuette wave ii may not move beyond the start of subminuette wave i. It’s also invalidated by movement above 1.3907 as within this zigzag micro wave B may not move beyond the start of micro wave A.