Daily Elliott Wave Strategy EURUSD - Downside Nesting or Larger Consol

Following the strong 3 wave decline from the 1.4940 peak earlier in the year or A wave on the Weekly Perspective, the Euro is settling into a larger B wave consolidation pattern in the 1.3145 to 1.4245 region. With the strong counter trend upside reaction to 1.4245 in a 3 wave format our favored view is for a contracting triangle pattern. Typically the B wave in this formation offers a deep retracement and in this case we have seen a 90 percent pullback to 1.3210. As the minor C wave in this drop has taken a diagonal price pattern, we remain bullish for an upside break of the 1.3610 pivot to allow a C wave swing to the start of the formation at 1.3865 that coincides with a 61.8 percent of the A wave target of 1.3900. This would still further contracting 1.3260 to 1.3900 range trade before the eventual downside break to the weekly 1.2925 target and possible even a test of 1.2625 monthly up channel support. Only a direct loss of 1.3210 would negate the consolidation theory and direct drop to the 1.2925 target.(see below)