A five-wave euro/dollar case and the support that still had to fail

What the snapshot records

This case follows a euro/dollar five-wave advance that began in late 2000 and was counted complete by the end of December 2004. After that count the pair declined. Later chart work then added a trendline break, a double top, and a leftover support line that had not yet failed.

Elliott-wave analysis here is a labeled sequence of impulsive and corrective swings used to mark when an advance may be complete and a reversal hypothesis can start. Completing those labels is when the reversal hypothesis can start. It is not, on its own, a claim that a later measured objective is already available.

The wave-2/4 line

Price later broke the rising line connecting the wave-2 and wave-4 lows. A trendline is a line through successive swing lows or highs whose break is treated as evidence that the prior directional structure is in doubt. The case treats this break as putting the prior uptrend in question.

The double top and its measured objective

On a shorter horizon the same market formed a double top with peaks in December 2004 and March 2005. The neckline sat near 1.2750. A double top is a two-peak pattern whose neckline break supplies a measured objective equal to the height of the formation. The neckline is the horizontal support under that double top that, once broken, activates the measured-move calculation. The measured objective taken from the pattern sat near 1.20.

What still held in May 2005

On 23 May 2005 the pair closed at 1.2595 and was trading below its 200-day moving average. Intermediate rising support from November 2003 still held just above 1.2500. Intermediate support is a shorter rising line that can stall a larger reversal until it too is broken. The case is explicit that this line had to break before the 1.20 objective could be reached.

Path versus target

The unresolved path question was whether price would bounce toward 1.27 first or break that intermediate line cleanly. The archive ties that fork to whether earlier shorts near 1.35 took profits or added. Path versus target is the distinction between a chart-derived price objective and the unknown sequence and timing required to reach it. A completed chart projection still leaves path and timing unspecified, which is the gap between reading the setup and trading it.

How the gates sit on this chart

Editorial reading applies that sequence to the archive facts as follows. The completed five-wave count by the end of December 2004 is the first gate: a reversal hypothesis can start. The break of the wave-2/4 line is the second gate: the prior uptrend is now in question. The double top, with peaks in December 2004 and March 2005 and a neckline near 1.2750, is the third gate: it names an objective near 1.20. Intermediate support from November 2003, still holding just above 1.2500 on 23 May 2005, is the fourth gate and the one that had not yet failed.

The May 2005 snapshot therefore sits between the last two gates. The 1.20 objective had been named. The intermediate line had not broken. That is why the open question was still a bounce toward 1.27 versus a clean break of that line, not whether the projection had already been earned. Editorial reading stops there. The archive does not resolve the path, and a named target does not fill in timing.