EUR/USD ~ Elliott Wave Count 12 July 2010

From the early June 1.19 low we got a pretty strong rally in the EUR/USD which most likely concluded last Friday at 1.27. The currency pair broke down of the ending diagonal that was forming over the last few days, backtested the broken trendline of the ED at 1.268 a few hours later and then sold off to below 1.26.

So far, I can count three waves from 1.19, i. e. corrective. Wave C almost equals A and B retraced 50 % of A, so pretty much a textbook zigzag. Confirmation that this is a completed zigzag we get below the wave B low at 1.215ish.

Late last year the EUR/USD was trading above 1.5. Since then it has lost up to thirty cents.

This strong down wave is coming to an end. I think there will be at least one more new low though. A possible target is the 1.15ish level where [A] equals [C]. Not sure whether the [A][B][C] labeling is correct, could also be a 1-2-3.

If the trendline (see chart) is regained and the downtrendline from the 1.51 top is broken, thus around 1.28-29, the wave from 1.51 ended at 1.19 and we should see much higher prices.