The Euro may have put in a significant top yesterday (August 20). Elliott Wave Analysis of the EUR/USD Currency Pair by Sid from ElliottWavePredictions.com.
The upward movement from the July 9 though August 20 in the Euro doesn’t look like a textbook contracting diagonal at first glance, but upon closer examination, it does meet all the rules and guidelines. Wave 5 (pink) was shorter than 3 , wave 3 was shorter than 1, and wave 4 was shorter than wave 2. Each numbered wave within the diagonal was corrective, and is either a zigzag (in waves 1,2,4 and 5) or, in the case of wave 3, a complex zigzag combination. Wave 4 also overlapped into the price territory of wave 1, as required in a diagonal.
If blue wave C was in fact an ending diagonal, that would explain why the final wave to the upside,(pink 5), was a “three” (or ABC), as mentioned in the last post. Each leg of a contacting diagonal must be a zigzag or zigzag combination.
Also, from July 26 forward, as is typically the case in contracting diagonals, the MACD continued to diverge with price (in this case, on a 480-minute chart) until the final waves were complete. So, the top for wave 2 black may very well be “in” for the Euro. A small degree downward 5-wave impulse followed by a corrective recovery is needed to confirm. If wave 3 black is underway, by the time it completes, it should span well in excess of 2000 pips. Invalidation is at 1.34532.
I’m designating this count the main count, and the count shown in the last post as the alternate. Both expect a downward impulse from the August 20 top, with an initial objective of 1.31376. Wave one of that impulse appears to be underway now.