In our previous post about EURUSD we came up with the idea of a triangle correction in progress. The invalidation level for that count was 1.1055. This is another precious feature of the Elliott Wave Principle – it tells you when you are wrong. In this case, we found out we were wrong on April 29th. This gave us the opportunity to think about other patterns, which might be developing. The first one that came into mind was the regular flat correction. It has the same wave structure as the expanding flat, but with no new extreme in wave B. The 4-hour chart of EURUSD makes it visible.
Each flat correction consists of three waves, labeled A-B-C. Waves A and B have 3 sub-waves, while wave C is a five-wave impulse. All of these conditions would be fulfilled by EURUSD, once wave 5 of C makes a new top. If this happens, we would have a complete corrective pattern. When a correction is over, the larger trend resumes. The bears are still reigning over EURUSD so we would be preparing for a new sell-off, which could take the exchange rate below 1.0460. Reaching parity still seems possible after all.
