On June 5th we showed you an analysis of EURUSD suggesting that we have a complete impulse to the south and therefore we should prepare for a three-wave correction in the upward direction. On the chart below you can see how EURUSD looked like when that forecast was made.
The previous analysis was published right after the European Central Bank lowered the interest rates. However, we as Elliotticians, cannot afford to let the news distract us. That is why the sell-off after the ECB announcement was just a normal fifth wave down for us. And the last thing you should do during fifth waves is going with the crowd. Almost a month later we can see how the situation has been developing so far.
The three-wave retracement to the north is a fact already. Five waves down from 1.40 to 1.35, followed by three waves up to 1.37 means that EURUSD has made the familiar Elliott Wave 5-3 cycle. Now we can expect the trend to resume with another five-wave decline. Keep in mind that this count would be invalidated at 1.4000. In other words, prices could extend their rally some more, but as long as 1.40 holds, we will look at EURUSD from the short side.
