EURUSD: Recent Decline Part of Correction

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The current EURUSD structure suggests that we could be looking at the final part of a cycle-degree zigzag consisting of sub-waves w-x-y.

At the time of writing, wave y seems to be under construction. This is also a primary-degree Ⓐ-Ⓑ-Ⓒ zigzag.

Waves Ⓐ and Ⓑ are fully formed, whereas wave Ⓒ is still under development.

We could see a decline in the bearish impulse wave Ⓒ near 1.0610 as part of the final part of wave y. At this level, prices will have reached the 161.8% extension of wave Ⓐ.

eurusd

Since we are still trading above Ⓐ, an alternative scenario should be also considered. According to which the formation of the primary wave Ⓑ is not completed yet.

If this hypothesis is correct, wave Ⓑ could take the form of a flat ‘three’, consisting of intermediate sub-waves (A)-(B)-(C).

We could see a decline in the bearish wave (B) near 1.0637 (wave Ⓐ low). Then, it could correct higher in wave (C) to complete the primary wave Ⓑ.

Wave Ⓑ could take us near the 1.1144 level, the high marked by intermediate wave (A), or even higher should it become an irregular pattern.

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