As I said yesterday, the break above 146.95 killed the preferred diagonal count and my EUR-bullish alternate count became the preferred count. The above chart shows the monthly EUR/USD chart, which calls for a major rally in wave 3 or C (I prefer the Major A-B-C count in contrast to the wave 1-2-3 count, but there is no hurry making any decision in the regard at this point).As can be seen wave 2 or B corrected just over 50% of wave 1 or A. The five wave rally in wave 1 or A told us that a Zig-zag was expected and that a 61.8% correction of wave 1 or A was the maximum we could expect.
The nexted validation point for this count is a break above 151.44 (the top of wave B) which would call for a continuation higher towards the top of wave 1 or A at 160.38. The long term target is at least 167.00 where wave 3 or C will be 61.8 times wave 1 or A, but ideally we should see wave equallity between wave 1 or A and wave 3 or C, which will target 197.00.
We should also notice, that the is no divergence at the monthly MACD indicator.
Zooming in on the long term count to the daily picture. The last part of the rally has lead to a break above resistance at the MACD indicator eliminating the last divergence, which have paved the way for the move towards the next important resistance at 151.44.The lack of impulsivness we saw in the rally from 134.29 to 145.20 has changed over the last couple of days and the rally from 141.55 is clearly impulsive in character as we would expect in wave 3.
Zooming in further to the hourly chart, I have worked on the micro-count to fit the bullish EUR-count. The problem was to fit in the decline from 145.20 to 141.55, but counting it as wave (i) red made it look obviouse and the acceleration we have seen since the 141.55 bottom is exactly what we would expect of a wave 3 and is the reason why the latest correction has been much smaller than what I was looking for.
Short term we should see support at 147.67 hold for the next move higher towards 151.44 and 156.26 targets. If my count is correct under no circumstance should we see a move 147.13 as that would leave us with an overlap between wave i and iv, which is not allowed.
Hi EWS,
ReplyDeletegood morning.
What a sad day: I have lost a further USD bull comrade. :-)
Please keep in mind: EWI stated yesterday evening, that only 5.4% USD bulls are left (5 day average sentiment).
Rallyes, especially 3rd waves, are not made out of that sentiment.
Take care and best to you,
Markus
Hi Markus,
ReplyDeleteSorry to jump Camp, but I had more or less run out of bearish counts. It's not quiet correct, that I don't have any bearish counts left, but they just isn't the preferred conuts at this point.
The very low USD-sentiment has been a major concern to me too, but I must go with my preferred count. If my count is wrong, it will show soon.
Take care too and the very best to you too.
EWS
Hi EWS,
ReplyDeleteI on the other hand have some bearish counts left which could fit well with EWI sentiment index... Please check them here: http://elliottwaveforex.blogspot.com/2011/04/glance-at-bigger-picture-again.html
Hi Velvet.
ReplyDeleteI too have the flat correction as a possibility, but at this point it is just not my preferred count, but clearly an option that must be beared in mind.
EWS