EUR Analysis Prior to Greece Referendum Vote

FX:EURUSD   Euro / U.S. Dollar
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With the highly anticipated referendum vote coming out of Greece this weekend, emotions will likely be running high on the open of trading Sunday for the EURUSD . With a highly charged event coming soon, I like to take a step back and assess what the waves are suggesting so as not to rely on other’s analysis and their opinions once the news is released.

First of all, current sentiment readings are clocking in at -1.79. This means 64% of EURUSD retail traders are currently short. SSI is a contrarian tool which suggests further gains are likely. This is because these traders are already positioned in the market so they become a future pool of buyers.

Now, looking at the Elliott Wave picture, the higher probability counts are noted in green text box on the chart. That means on June 28, prices completed red wave (c) which is an ending wave to the downside. That leaves a simple 5 wave move higher that likely breaks 1.1465. That also suggests we may be beginning red wave ( iii ) of that 5 wave move now. Third waves tend to be the longest and strongest and the Greek vote could provide the rocket fuel .

For those unfamiliar with EW and if you wish to see the idealized pattern at play, view this link and place the June 28 EURUSD low at the start of the blue line higher. In essence, the “you are here” dot would be starting the climb up the blue line.

Elliott Wave analysis is probabilistic. We never know for certain what is going to happen so it is certainly possible for prices to drop hard on Sunday. I have those counts de-emphasized and listed in the red text box. De-emphasized means they are lower probability in my opinion, but still possible.

Bottom line, my bias is bullish and 1.0815 is the key level which would turn me bearish . If you missed the long entry in the 1.09-1.10 area we’ve discussed for the past couple weeks, the closer a trade can be entered near 1.0815, the better risk to reward ratio.

On Monday’s weekly US Opening Bell webinar, we’ll update the action from Sunday and eliminate counts as needed to see what the higher probability move is going forward. You are more than welcome to join with a free 14 day registration to the DailyFX Plus Live Classroom:


The webinar is held at 9:30a ET (New York time) and the archive will be made available afterwards at the same spot.

In closing, keep in mind prices are likely to open a significant distance away from where they close today. I don’t know if the gap would be higher or lower so there is risk of getting slipped on a stop loss or stop entry on the Sunday open. If you hold a trade over the weekend, make sure it is small so a slipped trade doesn’t eat too much of your equity.

I would be interested in hearing from other EW’ers what your preferred count is. Good luck!
On a very small time frame, EURUSD may be putting the finishing touches on a leading diagonal. If so, prices should drift higher overnight but stay below 1.1160 for the next day or so. More importantly, it would suggest a temporary low is in place.

Leading diagonals take place in the 'A' wave of an A-B-C move or in the '1' wave of a 1-2-3-4-5 move. So if we hit 1.1110-1.1160 overnight, that furthers the bullish case.

IvanLabrie JWagnerFXTrader
Nice, was thinking ABC up.
EUR is declining and our view is bullish huh?
Is your view bullish? Mine is until 1.0815 is broken.
+2 Reply
deren JWagnerFXTrader
I'm Bearish until 2002 lows.
Hi Jeremy....Can I ask a questions....there are 5 waves down from June 18th to 28th......it then launches straight into 5 waves up...why isn't there an abc correction after the 5 waves down? Thanks.
+1 Reply
JWagnerFXTrader DavidRoberts
That is a great EW question. Many times, the end of a correction ends in 5 waves. In this case, the circle 'a'-'b'-'c' expanded flat would subdivide as 3-3-5. Then, a motive move higher of 5 waves would take place.

The reason you are having difficulty seeing it in your mind is that the proposed 5 wave move higher is 1 degree of trend higher than the circle 'c' wave sell off. Ideally, it labeling the first 5 wave move in red and the ensuring 5 wave move higher in green. Realistically, on the chart, they might look similar.

That is why you may hear me say things like "one or 2 more pokes"...it is sorting through the degrees of trend which are regularly off in analysis at smaller time frames.

Great question - I had the exact same one when I was learning EW.
DavidRoberts JWagnerFXTrader
Yes, I had just about worked that one out, over the last couple of days! Thanks for confirming it Jeremy!!
Hi Jeremy. New to EW and wondering what you make of the activity from 6/5 - 6/18. I see it is labeled as (b) but not sure how to count the activity. Any insight would be helpful. Thanks in advance.
Pathfinder Pathfinder
Jeremy - two questions for you: saw your post on oil. As you shared in this morning's session, there are relationships between the items you covered. How does your new assessment of oil affect your analysis of EURUSD?
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