It seems that the euro had a bit of a fight left in it, as price rallied for nearly 300 pips, making a new high in the process.

Nonetheless, this may not be the right time to turn fully bullish. For one thing, the pattern we’re currently tracking, which is a contracting triangle, is characterized by converging trend lines, so price isn’t expected to move much higher, if at all. And for another, there’s a bearish divergence between price and momentum, which indicates that the upwards potential should be limited.

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: 1.1714 – 1.0516
– Confirmation Point: 1.1143
– Downwards Target: 1.0980 – 1.0697
– Wave number: Minor D
– Wave structure: Corrective
– Wave pattern: Zigzag

Big Picture

EURUSD

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.

Intermediate wave (B) is forming a contracting triangle labeled minor waves A through E.

Within it, 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.

Main Weekly Wave Count

EURUSD

This main count sees that minor wave C formed a double zigzag labeled minute waves w, x and y, and it’s either complete (which is more likely) or near completion.

Within it, minute wave y formed a zigzag labeled minuette waves (a), (b) and (c).

Within it, minuette wave (b) formed a running flat labeled subminuette waves a, b and c.

This count expects the euro to be moving towards the downside in minor wave D. This will be confirmed by movement below 1.1143.

The MACD indicator supports this count by showing a bearish divergence, indicating that momentum is waning and that the recent price high may not have enough steam to sustain it for much longer.

At 1.0980 minor wave D would reach 38.2% the length of minor wave B, then at 1.0697 it would reach 61.8% of its length.

This wave count is invalidated by movement above 1.1714 as minor wave C may not move beyond the start of minor wave B. It’s also invalidated by movement below 1.0516 as minor wave D may not move beyond the start of minor wave C.

Note: All information on this page is subject to change. The use of this website constitutes acceptance of our user agreement. Please read our privacy policy and legal disclaimer. Opinions expressed at FXstreet.com are those of the individual authors and do not necessarily represent the opinion of FXstreet.com or its management. Risk Disclosure: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.

Recommended Content


Recommended Content

Editors’ Picks

EUR/USD stays below 1.0800 after upbeat US data

EUR/USD stays below 1.0800 after upbeat US data

EUR/USD stays under bearish pressure and trades slightly below 1.0800 in the American session on Thursday. The data from the US showed that the real GDP growth for the fourth quarter got revised higher to 3.4% from 3.2%, supporting the USD and weighing on the pair.

EUR/USD News

GBP/USD stays in daily range above 1.2600

GBP/USD stays in daily range above 1.2600

GBP/USD fluctuates in a narrow channel above 1.2600 on Thursday. The better-than-expected Initial Jobless Claims data from the US and the upward revision to the Q4 GDP growth helps the USD stay resilient against its rivals and limits the pair's upside.

GBP/USD News

Gold clings to strong daily gains above $2,200

Gold clings to strong daily gains above $2,200

Gold retreats from daily highs but holds comfortably above $2,200 in the American session on Friday. The benchmark 10-year US Treasury bond yield stays above 4.2% after upbeat US data and makes it difficult for XAU/USD to preserve its bullish momentum.

Gold News

XRP price falls to $0.60 support as Ripple ruling doesn’t help Coinbase lawsuit against SEC

XRP price falls to $0.60 support as Ripple ruling doesn’t help Coinbase lawsuit against SEC

XRP programmatic sales ruling by Judge Torres was completely rejected by another US Court that ruled in favor of the SEC in a lawsuit against Coinbase. 

Read more

Portfolio rebalancing and reflation trades emerge into Q2

Portfolio rebalancing and reflation trades emerge into Q2

Yesterday’s price action pointed at a possible end-of-quarter portfolio rebalancing as the session saw the laggards of the quarter like Apple and Tesla gain, and the stars like Microsoft and Nvidia retreat.

Read more

Majors

Cryptocurrencies

Signatures