EURUSD: The Middle Game in a Bearish End of Year [Video]

The euro is continuing its sideways, range-bound movement as it has been doing for a year and a half now. This seeming lack of action can be brutal for long-term traders on the weekly chart, but it does provide plenty of opportunities on the daily and hourly charts (available to our premium members).

The good news is that, after this type of nerve-wracking inaction, the market inevitably goes into hyper-drive of activity sooner or later, usually in the direction of the previous trend. And we’re providing two competing alternatives and waiting for the market to show which one to follow.

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: 1.1366 – 1.0525
– Confirmation Point: 1.0931
– Downwards Target: 1.0931 – 1.0662
– Wave number: Minute y
– Wave structure: Corrective
– Wave pattern: Zigzag

Weekly Alternate Count
– Invalidation Point: 1.1616 – 1.0525
– Confirmation Point: 1.1348
– Upwards Target: 1.1348 – 1.1466
– Wave number: Minute x
– Wave structure: Corrective
– Wave pattern: Flat

Big Picture

The bigger picture sees that the euro is moving towards the downside in teal wave x, which is forming a double zigzag labeled maroon waves W, X and Y.

Maroon wave Y is forming a zigzag labeled black waves (A), (B) and (C).

Black wave (A) formed an impulse labeled blue waves 1 through 5.

Black wave (B) is forming a contracting triangle labeled blue waves A through E.

Main Weekly Wave Count

Within black wave (B), blue wave D is unfolding as a double zigzag labeled pink waves w, x and y.

Within it, pink wave y is forming a zigzag labeled green waves (a), (b) and (c).

Within it, green wave (b) is most likely forming a flat labeled orange waves a, b and c.

This count expects the euro to continue moving towards the downside in pink wave y over the next couple of weeks.

At 1.0931 pink wave y would reach 61.8% the length of pink wave w, then at 1.0662 it would reach 100% of its length.

This wave count is invalidated by movement above 1.1366 as green wave (b) of this zigzag may not move beyond the start of green wave (a).

Alternate Weekly Wave Count

This alternate count sees that pink wave x is still unfolding as a flat labeled green waves (a), (b) and (c).

Within it, green waves (a) formed a double zigzag labeled orange waves w, x and y.

Green wave (b) is likely forming a zigzag labeled orange waves a, b and c. It should go all the way down to retrace at least 90% of green wave (a).

This count expects the euro to continue moving towards the upside in pink wave x.

At 1.1348 pink wave x would retrace 61.8% of pink wave w, then at 1.1466 it would retrace 78.6% of its length.

This wave count is invalidated by movement above 1.1616 as pink wave x of a double zigzag may not move beyond the start of pink wave w.