Main Elliott Wave count of EUR currency basket against 16 other currencies (EUR, USD, GBP, CHF, JPY, CAD, AUD, NZD, CNH, DKK, MXN, NOK, PLN, SEK, SGD, ZAR, TRY).
Monthly Chart
The sideways price action in the EUR basket since the 2012 low is clearly a correction and as such likely a wave B. The question is if the 2020 high marked the end of it or not. In my view, it is an open question and one we probably won’t have the answer to for some time.
It is possible to count it as wave (1) & (2) from the high but there is no clear indication that wave (3) is on its way. To the contrary, the Euro has been very resilient lately, which is why I have changed my view of this currency from bearish to neutral. To choose a side I like to see some commitment first, which is why I currently is tracking two counts with equal conviction or lack of may be more correct so say.
The second count utilizes the same (W) (X) (Y) corrective pattern but extend it to be more complex. It also outlines the pattern in a slowly rising channel where the final (Y)-wave of B is aiming for the channels upper trendline. As with any correction, there is no clear way to conclude it to be completed, more than a 5 waves impulse that is breaking support/resistance on a closing basis.
So far, there is no clear evidence of this, which is why I see both these counts as equally probable. Also, I never make claims to know where price will go next. However, my fair guess based on experience is that it may continue to slowly chew its way higher, as it has done the last year or so but then suddenly drop. It will then be the character of that drop, if it will be shorter or a deeper impulsive move that determines which of the two counts that comes out on top.
Weekly Chart
The weekly chart doesn’t add much because the last wave up doesn’t have many swings to hang up a sub wave count on. It underlines the correction, though, which is why I think it seems natural with a sharper ABC patter up to the channel roof, divided by a smaller degree flat, which is where we are now. A somewhat deeper drop into support first, before moving higher, can’t be excluded though. The more likely path, however, is an initial test higher first to nearby resistance.
