The EUR/USD Correction Continues Developing

As I thought, the EUR/USD correction is not over yet. The pair resumed its depreciation and I think it is headed for 1.2180 – 1.2140. That is a strong support zone and I think it will probably stop the depreciation.

1.2140 is at 50% Fibo of the supposed third out of fifth wave, and a fall to that level would mean the development of a rather deep fourth wave. According to the Elliott Wave Theory when there is an impulse the fourth waves usually reach 38.2 % Fibo although sometimes there are more shallow (23.6 % Fibo) and deeper (50 % Fibo) waves. If the supposed fourth wave is deeper than 50 % we should re-examine the way we count the waves.

For now, however, my expectation is for a deeper fourth wave, after which the pair should renew its rally for a fifth out of fifth wave as it is marked on the screenshot, a count which is still valid, in my opinion.