YouTube video: Sid's long & intermediate term Elliott Wave analysis of the EUR/USD currency pair

I've made the script from the above video available below, so those of you who prefer a language other than English may use a translation program to follow along:

Hi, this is Sid from ElliottWavePredictions.com. In today's video, we're going to start with a very long term view of the EUR/USD currency pair, and then we'll keep zooming in so we can predict to a high degree of probability what's going to happen in the next few days and weeks. This chart consists of monthly candles and goes all the way back to 1976, Since this low below .7 in February 1985, the Euro has moved up in a 23 year long zigzag in Cycle Waves A, B, and C. Those break down as a 5-3-5.

After this high in July 2008, the Euro has moved down below the extreme of the September 1992 high, so this structure cannot be a 1-2-3-4-5 impulse to the upside. We must therefore expect, at a minimum, a complete 3-wave corrective structure down from the July 2008 high. So lets zoom in to the weekly candles and examine the movement since that high, which we have labeled here as a Cycle wave B of an Expanded Flat (in Elliott Wave terms). However, lets ignore that for now as we narrow down the possibilities of exactly what this structure is, once again, in Elliott Wave terminology.

So far, we've had what counts best as 3 waves down, then 3 waves up, then 3 waves down to a new low in June 2010. Most importantly, these 3 waves cannot be considered a complete 3 wave correction. They can't be a zigzag, because zigzags break down as a 5-3-5. They can's be a flat, because flats are 3-3-5. The can't be the start of a triangle, because the June 2010 low is lower than the October 2008 low. They also can't be a 1-2-1-2 start to a bearish pattern, because they subdivide into 3's. What's left as most probable then is a Leading Contracting Diagonal for Primary wave 1 (burgundy) to the downside.

If this count is correct, this upward movement since the June 2010 low MUST form a zigzag to complete intermediate wave 4 black. One of the Elliott Wave rules is that waves 2 and 4 of a leading diagonal always subdivide onto zigzags. Also, by the way, the MACD is confirming this count, by making lower highs and lower lows. This is typical MACD behavior in a diagonal. Also, wave 3 is shorter than wave 1. This must therefore be a contracting leading diagonal. So, I've drawn a line between the extremes of waves 1 and 3 black, and have placed a parallel copy intersecting the extreme of wave 2 black. We now have a maximum resistance line for wave 4 black.

Once wave 4 black is finished, if this count is correct, the Euro must descend to below 1.875 because another Elliott Wave rule is that wave 5 of a leading diagonal must end beyond the extreme of wave 3. Another Elliott rule is that a wave 5 of a contracting diagonal is always shorter than wave 3, so the maximum depth for wave 5 black, and therefore Primary wave 1 (burgundy) is 1.0133.

The only question left is, when will the Euro start to go down? The answer isn't completely clear yet, so lets look at the wave 4 black so far to determine its most likely ending target zone. My preferred count is that so far we have seen 5 pink waves up for wave A blue, followed by 3 pink waves down to complete wave B blue, and we therefore need to see 5 pink waves up to beyond the extreme of wave A blue to complete wave C blue, and therefore intermediate wave 4 (black).

Or, as some are claiming, we may have already seen the completion of waves A, B and C blue, and that wave 4 black may have ended here. However, lets take a closer look at this most recent movement starting with the June 7, 2010 low on a daily chart. This wave A blue counts best, in my opinion, as a 5-wave impulse, and the MACD bears this out by peaking at right about the wave 3 pink label, and the diverging. While the wave 5 peak made a new high, the MACD did not. This is typical MACD behavior in a 5 wave impulse.

Also, the price movement after the November 4, 2010 high really supports this count. We have an ABC for W, an ABC for X, and an ABC of Y to complete wave B blue (minor). Then, very importantly, this is followed by 5 waves up, which I've labeled pink wave 1, and then a 3 wave ABC down for pink 2. So, therefore, I'm expecting a complete 5 pink waves up to complete wave C blue, and therefore wave 4 black. The minimum target for wave 4 black, because this structure since the June 2010 low must be a zigzag, is 1.42834, the extreme of wave A blue. The maximum is the slanting line up here, which is that line we drew intersecting the extreme of wave 2 black, which is parallel to a line drawn between the extremes of waves 1 and 3 black.

So, there you have it. This count calls for the Euro to climb to the 1.45 region over the next couple of weeks, and then drop about 300 pips over the following 12 months or so. One thing though, when looking at 4 hour candles, I'm expecting strong upwards movement virtually immediately. If that doesn't happen, and this trend line drawn from the start of wave 1 pink through the extreme of wave 2 pink breaks, wave 4 black may have already ended, and the downward movement to below 1.2 may have already begun. The character of the price movement over the next couple of days will tell us which count is correct.

Thanks for watching. I hope this video will be helpful to your trading. I'll be making these videos from time to time to explain more fully what my regular chart postings at ElliottWavePredictions.com are all about. Disclaimer: All of my posts are informational only, and are not intended as recomendations for trades and/or investments. This is Sid from Elliott Wave Predictions. See ya soon . .