The wave counting of the 4-hour chart for the Euro/Dollar instrument remains unchanged for the time being. The instrument gained about 65 basis points, on Friday and Monday, which gives reason to expect the completion of the construction of a downward trend section. The wave counting of the proposed wave e looks quite convincing now and can start building not only a new upward wave, but also a new upward trend section. A successful attempt to break through the 100.0% Fibonacci level indirectly indicates the readiness of the markets to buy the instrument. I am not considering the option of complicating the current wave count yet. Still, you need to give the current option a chance to be realized, which involves building an upward set of waves. Let me also remind you that for more than six months, the pair has been building only corrective structures, which is clearly visible in the picture of the higher scale (below). Thus, at this time, I expect the construction of another three-wave corrective structure.
The news background for the Euro/Dollar instrument was quite weak on Monday. In the European Union, the index of business activity in the manufacturing sector (a decrease from 62.8 to 61.5 points), the index of business activity in the services sector (a decrease from 59.8 to 59.7 points), as well as the composite PMI (a decrease from 60.2 to 59.5 points) were released. Business activity indices for Germany were also released, where all three indicators decreased compared to previous values. Thus, all six indices that could have an impact on the mood of the markets today turned out to be not in favor of the euro currency. Nevertheless, the demand for the euro is increasing today, which gives additional hope that the markets are already tired of selling the instrument and are now ready to buy it, which corresponds to the current count.
If this is true, then now is a very good time to buy, since the instrument is at the very beginning of building a new upward trend section. The news background will be absent tomorrow, so the markets can safely continue to buy the instrument. I am not considering alternative options right now, since the wave counting looks quite convincing. However, you should never lose sight of other options. The markets will likely find new reasons for selling the instrument. Or Jerome Powell or the Fed will give them at the end of this week.
Based on the analysis, I conclude that the construction of the downward section could have ended around the level of 1.1704, which is equal to 100.0% according to Fibonacci. Wave e has received a pronounced five-wave internal structure, so now I expect the beginning of building an upward set of waves or complicating the current trend section. The markets are still holding the instrument above the 17th figure, so I advise you to buy euros for each MACD signal "up" in order to build a new upward set. A successful attempt to break through the 100.0% Fibonacci level will indicate that the instrument is not ready for further increase.
The wave counting of the higher scale looks quite convincing. We see three three-wave sections of the trend, which are approximately the same in size. However, the last section of the trend quite unexpectedly took a more complex form, but it still ended (presumably) in the same place as the previous three-wave section.
