Last Tuesday, June 16, we highlighted 2 higher probability options which called for shorter term moves. (see "EURUSD Triangle Thrust Before FOMC?"). Now that those moves have exhausted AND since we have broken below 1.1200, the expanded flat option is now the higher probability wave picture.
This suggests a move lower in 5 waves from the June 18 high that likely terminates in the 1.09-1.10 region.
At that point, in my opinion, the EURUSD becomes a compelling long trade with a good risk:reward ratio. Since this count calls for us to be in a circle b wave, that means we'll need a circle c wave higher that likely exceeds 1.1500.
In the meantime, continue to look for USD strength.
Comments and competing wave counts are welcome.
Too many views - yes there will always be multiple counts...some look right. Psychological studies prove we bias our views so I'm interested in counts I may have overlooked. Then, I aspire to trade when multiple views are lined up in the same direction OR if there is a strong risk:reward ratio trade.
That does look like a cup for sure. Notional volume of trades accelerated at the bottom of the cup, then decelerated as we approach the handle. Nice catch on the TA front!
What you have listed is feasible ... in EW anything though improbable, is still possible.
2 things stand out to me:
1) the purple 3 as you have noted looks like a clean 5 to me on a 4hr chart. Therefore, wave 4 overlaps wave 1 which violates a rule.
2) Also, the red 'b' wave typically retraces no more than 1.382 x wave a in an expanded flat correction. In your image, red wave b is quite large, so the look isn't ideal.
Here are a couple options as I see it:
Learning EW takes trial and error in the beginning while watching others. Good shot!
Yes, diagonals may overlap (wave 1 & 4). However, diagonals carve out as 3-3-3-3-3 and only appear in wave 1, 5, A, C. Impulses carve as 5-3-5-3-5.
Therefore, when you look internally, what is labeled as purple 3 on a shorter time frame looks like a clean 5 wave affair. Since diagonals are 3-3-3-3-3 and since one of the waves looks like a 5, it doesn't appear to fit.
As you have it labeled, I would agree purple 1 is a 3 wave, purple 3 is 5 wave, and purple 5 looks like a 3. Therefore, take a look at wave combinations that get you 3-3-5-3-3. Me thinks...3-3-5 (flat)-3 (x)-3 (zig-zag)
Sometime, you have to 'force' counts in, but start with what looks natural.
The Elliott Wave analysis is like a GPS system or latitude/longitude. It provides you an indication of where you are at in the trend. Even if you don't know how to analyze with EW yourself, it would be beneficial in my opinion, to know how to read the labels.
This week's sell off and subsequent rebound higher is playing out as originally assessed. The 1.0815 level is key here. 1.1290 is a key level (the June 19 low) to help solidify the low. Once I re-acquaint myself with the charts, I'll send an update to the community.