May 5, 2023: EURUSD Elliott Wave and Technical Analysis – Video and Charts
Summary: The bigger picture for Euro expects overall upwards movement for the long term, most likely to not make a new high above 1.60380.
For the short term, a pullback may continue lower to a target zone from 1.02862 to 0.99505. Thereafter, a strong third wave up may begin.
An alternate, also predicting long-term upwards price movement, expects a short-term pullback in the coming weeks.
Quarterly and monthly charts were last updated here.
WEEKLY CHART
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The weekly chart focusses on the end of Super Cycle wave (b) and the start of Super Cycle wave (c).
Within Super Cycle wave (c), cycle wave a must subdivide as a five wave motive structure. Primary wave 1 within cycle wave a would be most likely incomplete.
Within primary wave 1: Intermediate wave (1) may be over at the previous high and now intermediate wave (2) may continue to find support about the 0.618 Fibonacci ratio of intermediate wave (1) at 1.01079.
Intermediate 2 may be unfolding as an expanded flat with minor B reaching 113% the length of minor wave A. Expanded flats are common structures. Minor wave C may have already started and must subdivide as a motive structure downwards.
A best fit channel has been drawn to encompass all of the present upwards movement. If price breaks below the best fit channel, then that would provide confidence the trend has changed from up to down.
Intermediate wave (2) may not move beyond the start of intermediate wave (1) below 0.95364.
DAILY CHART
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The daily chart focuses on intermediate wave (2).
This week the ending diagonal remains intact with no new high above the high of April 26, 2023. Recent price action can be cleanly labeled as minuette (i) and (ii), so minor wave C may be underway.
Two best fit channels can be seen, in orange and blue. A full candlestick breaking below and not touching either one of these channels will be considered a bearish signal and confidence in a new short-term trend. Price has not closed below either best fit channel.
Within the zigzag of minor wave B, minute wave c may have completed as an ending contracting diagonal. Within the diagonal, minuette wave (v) is shorter than minuette wave (iii) and minuette wave (iii) is shorter than minuette wave (i). If minuette wave (v) continues any higher, then it may not be longer than minuette wave (iii), so that the rules regarding wave lengths for contracting diagonals are met. Minuette wave (v) may not move above 1.1271.
With minor wave B complete, a target is calculated for minor wave C to reach 1.618 times the length of minor A at 1.02862, giving us a range from 1.02862 to 0.99505. This wave count is very bearish as diagonals often precede sharp movement.
HOURLY CHART
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The hourly chart focuses on minuette waves (ii) and (iii).
Recent overlapping price action after the end of minuette (ii) could be subdividing as an impulse (with major overlapping) or possibly in the early stages of a diagonal. Invalidation for each of these ideas is close at 1.0914. A breach of this level would be bullish for the short term.
Price is consolidating between the orange best fit channel and the invalidation levels above.
For the short term, a downwards trend may be in its early stages.
ALTERNATE WEEKLY CHART
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This alternate reflects the possibility of intermediate (2) as complete.
This chart expects a shallower pullback in the short term followed by more upwards movement.
Minor wave 1 be complete. Minor wave 2 is expected to begin.
A target is calculated for intermediate (3) to reach 1.618 the length of intermediate (1) at 1.29378.
Minor wave 2 may not move beyond the start of minor wave 1 below 1.05169.
ALTERNATE DAILY CHART
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This daily alternate wave count expects a shallow pullback for minor 2.
The upwards movement from March 23 to April 26, 2023, subdivides much easier as a leading contracting diagonal than an extending third wave. Technicals support this view.
This alternate expects a less severe pullback in the coming weeks, but has a lower probability given the brief shallow intermediate (2).
A target has been calculated for minor wave 2 to reach the 0.618 fibonacci retracement of minor 1 at 1.07376. There is no upwards invalidation for this alternate.
ALTERNATE HOURLY CHART
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This alternate reflects the same price movement as the main hourly chart, with a less severe correction. The short-term invalidation is at 1.10914; a second wave correction may not move above the start of subminuette wave i.
The blue best fit channel contains all price action for the past month, beginning March 26, 2023.
TECHNICAL ANALYSIS
VOLUME
VOLUME WEEKLY CHART
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Volume appears bullish, increasing to the upside. However, the last week has closed red as price moved essentially sideways. It is best to look inside this week for a clearer picture of the short-term volume profile.
WEEKLY CHART
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This week’s candle is a spinning top doji, an indicator of indecision. Last week yielded a shooting star. If next week’s candlestick has a red body, then it would be very bearish.
Next overhead resistance sits at 1.1170.
ADX has just reached extreme.
This chart is bearish.
VOLUME DAILY CHART
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The past week shows an increase in volume with sideways movement. The biggest volume appears on the recent bearish candlesticks, a bearish sign.
On balance volume failed to move out of the previous range.
DAILY CHART
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May 4th, one day ago, yielded a dark cloud cover reversal pattern. The combination of multiple dark cloud covers and bearish engulfing patterns warn of an impending price change from the previous uptrend.
ADX being extreme supports a possible reversal from the top, as does the slight bearish divergence between price and RSI.
The moving averages are very bullish, all sloping up, with the 13 day above the 50 and the 50 day above the 200.
This chart is bearish, supporting the main Elliott Wave count.
Published @ 03:12 p.m. ET on May 6, 2023.
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