21.10.202012:33 Forex Analysis & Reviews: EUR/USD analysis 21/10/2020: Democrats and Republicans continue to disagree on US economy financial assistance

The wave marking of the EUR/USD instrument still looks quite convincing and has not changed at all recently. Thus, the main option remains to increase quotes from the current levels within the framework of building wave 5 with goals located above the maximum of the expected wave 3 or C. This means that the instrument will increase to at least 20 figures, most likely even higher. There is no question of adopting a more complex form of wave 4 at this time. Wave 5 already takes a rather complex form, since its internal wave structure is not similar to the standard pulse one.

The smaller-scale wave marking still shows that the intended wave 4 has assumed a three-wave form and is complete. If this is true, then the price increase will continue within wave 5. In recent days, there were some doubts about the execution of this particular option but the unsuccessful attempt to break the 23.6% Fibonacci mark indirectly indicated the readiness of the markets for new purchases of the Euro. However, the assumed wave 5 has rather complicated its internal wave structure and may turn out to be very long.

The Euro took advantage of the negative news background from America and resumed its increase according to the current wave markup. The main problem in the US now is not the election (which is less than two weeks away0 but the fact that the assistance package for the economy has not been agreed by Democrats and Republicans. Moreover, according to Democrats, Trump and his team are engaged in populism and are trying to extract maximum political benefits from the aid package. According to Republicans, the Democrats are simply dragging their feet until the election, trying to put Donald Trump in the most unfavorable light before the voters. The US economy is not getting the necessary support from the government at this time. However, at the same time, it is impossible to say with certainty that the Dollar is declining now precisely because of the lack of assistance to the economy from Congress. It is worth recalling that since August 1, when the previous package of assistance in countering the pandemic ended, Democrats and Republicans have not stopped negotiating a new package. However, during all this time, the Dollar has not declined much. Thus, I believe that the Dollar's decline will continue, but it will be based on a whole set of factors, including the election factor. ECB President Christine Lagarde will also speak today, but I don't think the markets will react to her speech in any way, since her speeches have been regular lately and the markets have a clear idea of what Lagarde's opinion on the current economic situation is.

General conclusions and recommendations:

EUR/USD instrument will presumably continue the formation of wave 5. Thus, at this time, I would still recommend purchasing the instrument with the objectives located about settlement marks of 1,2012 (which corresponds to 0.0% of Fibonacci) on every MACD signal up, based on building a global wave 5. However, in the case of a successful attempt to break 23.6% level will come into force alternative of increasing the complexity of wave 4.