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The wave marking on the euro/dollar instrument's 4-hour chart is convincing. The upward portion of the trend has corrected itself. Initially, I believed three waves would develop, but it is now abundantly clear that there are five waves. As a result, the waves a, b, c, d, and e have a complex correction structure. If this supposition is accurate, the building of this structure may have already been finished since the peak of wave e is higher than the peak of wave C. In this instance, it is anticipated that we will construct at least three waves downward, but if the most recent phase of the trend is corrective, the subsequent phase will probably be impulsive. Therefore, I am preparing for a new significant decline in the instrument. The market will be ready to sell when a new attempt to breach the 1.0359 level, which corresponds to 261.8% Fibonacci, is successful. The peak of the anticipated wave e was still present, so removing quotes from the lows this week did not violate the wave marking. As a new downward trend segment, the most recent increase in quotes can be seen as an internal correction wave. The upward portion of the trend would take on a more extended form if an attempt to break through wave e's current peak were to be successful.
A positive week for the euro comes to a dull end.
On Friday, the euro/dollar instrument decreased by 20 basis points. The range of movements during the day was low. There was no prior news context. The European currency brought a dull conclusion to the week to its asset. Recall that there weren't many significant economic developments this week. Still, despite that, the market found reasons to boost demand for the euro, which resulted in an upward wave. Since the news background is currently not entirely clear and the market does not always clearly win it back, it is still more appropriate to start from the wave markup. Only this week, on Wednesday, something interesting happened. Indices of economic activity and FOMC protocol. The Fed protocol could be "turned" in any direction, even though the indices barely changed from their October values. Therefore, I cannot conclude that the week's rise in demand for the euro was brought on by the news cycle.
Next week, everything will remain the same. One significant report on inflation in the European Union will be released. It would already be a small victory if European inflation started to decline for the first time in a very long time. But for the entire week, this is just one report. Therefore, waves serve as the foundation in this case. The current situation is as follows: in any case, we should see a decrease within wave 3 or C if the wave marking for the current period is accurate. Even though wave c will be the last one, everything will still end here. However, the decline should occur.
Based on the analysis, the construction of the upward trend section is finished and has grown more complicated to five waves. As a result, I suggest making sales with targets close to the estimated 0.9994 level, or 323.6% Fibonacci. There is a chance that the upward section of the trend will become more complicated and take on an extended form, but this chance is currently at most 10%.
The wave marking of the descending trend segment becomes more intricate and lengthens at the larger wave scale. The a-b-c-d-e structure is most likely represented by the five upward waves we observed. After the construction of this section is finished, work on a downward trend section may resume.
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