EURUSD: Waiting for the Euro to Give In

Last week we expected the euro to start falling again, which was exactly what happened. Price came crashing through our confirmation point, and then continued downwards to come 33 pips short of reaching our first target.

This price drop occurred in 5 waves, which strongly confirms our view that the downtrend is back in play. But as we know by now, every completed 5-wave sequence needs to be countered by a corrective move in the opposite direction, which is what we expect to see during this week.

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: 1.1495

– Confirmation Point: 1.1096

– Upwards Target: 1.1125 – 1.1266

– Wave number: Minute ii

– Wave structure: Corrective

– Wave pattern: Zigzag, Flat, or Combination

Big Picture

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).

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

Within it, minor wave 1 is complete.

Minor wave 2 retraced just over 61.8% of minor wave 1, and it’s most likely complete.

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

At 1.0473 minor wave 3 would reach 161.8% the length of minor wave 1, then at 0.9842 it would reach 261.8% of its length.

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 minor wave 2 formed a double combination labeled minute waves w, x and y, each forming a zigzag labeled minuette waves (a), (b) and (c).

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

Within it, minute wave i formed an impulse labeled minuette waves (i) through (v), and it’s most likely complete.

This count expects the euro to start moving towards the upside in minute wave ii. This will be confirmed by movement above 1.1096.

At 1.1125 minute wave ii would retrace 38.2% of minute wave i, then at 1.1266 it would retrace 61.8% of its length.

This wave count is invalidated by movement above 1.1495 as minute wave ii may not move beyond the start of minute wave i.