EURUSD: A Moderate Upwards Correction Ahead

As expected the euro continued moving strongly towards the downside, reach both our first and second targets, and exceeded them by 25 pips.

Since price has been moving largely as expected and well according to the rules and guidelines of Elliott Wave analysis, we would now expect to see a moderate sideways-to-upwards correction that should last for two or 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: 1.1376 – 1.0516
– Confirmation Point: –
– Upwards Target: 1.1101 – 1.1166
– Wave number: Minute b
– Wave structure: Corrective
– Wave pattern: Zigzag, Flat, Triangle, or Combination

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.

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 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.

Minor wave D is likely forming another zigzag labeled minute waves a, b and c.

Within it, minute wave a is most likely complete.

This count expects the euro to start moving towards the upside in minute waves b. Minute wave a took 14 days to unfold, so we can expect minute wave b to develop over two or more weeks.

At 1.1101 minute wave b would retrace 50% of minute wave a, then at 1.1166 it would retrace 61.8% of its length.

This wave count is invalidated by movement above 1.1376 as minute wave b of minor wave C may not move beyond the start of minute wave a. It’s also invalidated by movement below 1.0516 as minor wave D may not move beyond the start of minor wave C.