EURUSD: Beginnings of a Temporary Decline

As expected the euro continued moving towards the downside. This is likely the beginning of a temporary downtrend that will span several more weeks.

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: 1.1718 – 1.0525
– Confirmation Point: –
– Downwards Target: 1.0951 – 1.0850
– Wave number: Minor D
– Wave structure: Corrective
– Wave pattern: Zigzag

Weekly Alternate Count
– Invalidation Point: 1.1718
– Confirmation Point: 1.0525
– Downwards Target: 1.0525 – 1.0430
– Wave number: Minor 3
– Wave structure: Actionary Corrective
– Wave pattern: Zigzag

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.

Main Weekly Wave Count

This main count sees that the euro is still moving sideways in intermediate wave (B), which is likely forming a contracting triangle labeled minor waves A through E.

Minor wave A formed a double zigzag labeled minute waves w, x and y.

Minor wave B formed a zigzag labeled minute waves a, b and c, retracing 95% of minor wave A.

Minor wave C formed a zigzag labeled minute waves a, b and c, retracing close to 78.6% of minor wave B. It’s either complete or near completion.

This count expects the euro to start moving towards the downside in minute waves a, b and c to complete minor wave D.

At 1.0951 minor wave D would retrace 50% of minor wave C, then at 1.0850 it would retrace 61.8% of its length.

This wave count is invalidated by movement above 1.1718 as minor wave C may not move beyond the start of minor wave B. It’s also invalidated by movement below 1.0525 as minor wave D may not move beyond the start of minor wave C.

Alternate Weekly Wave Count

This alternate count sees that intermediate wave (B) is already complete and that intermediate wave (c) is forming an ending diagonal labeled minor waves 1 through 5.

Minor wave 1 formed a zigzag labeled minute waves a, b and c.

Minor wave 2 also formed a zigzag labeled minute waves a, b and c, retracing nearly 78.6% of minor wave 1. It’s either complete or near completion.

This count expects the euro to resume moving towards the downside in minute waves a, b and c to complete minor wave 3. This will be confirmed by movement below 1.0525.

At 1.0525 minor wave 3 would reach the end of minor wave 1, then at 1.0430 it would reach 78.6% 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.