The wave counting on the 4-hour chart is still completely understandable and has not undergone any changes in recent days. Thus, I conclude that at the moment the construction of the downward trend section, which began in early January, is completed. Therefore, I also conclude that the construction of the first wave of a new upward trend section continues now. Previously, I was targeting the 21st figure for this first wave. A successful attempt to break through the 50.0% Fibonacci level showed that the markets are ready for further purchases of the European currency. Thus, the 21st figure can be achieved in the near future. If at this time a new upward trend segment has really begun to form, then whatever it may be in its internal structure, it can turn out to be quite extended. The low targets of the three-wave structure are located near the highs of January. If the part of the trend turns out to be impulsive, then the quotes of the instrument may rise even further than the 23rd-24th figures.
The news background for the Euro/Dollar instrument on Thursday and Friday was quite interesting, but I cannot say that the published reports had any meaning for the markets. On Thursday, the US released its March retail sales report, which showed an increase of 9.8% month-on-month and 8.4% excluding car sales. On an annualized basis, the indicator increased by 27.7%. However, the annual value should not be taken into account now, since it was in March of last year that the pandemic and the crisis began, so it is not surprising that all economic indicators collapsed then. Therefore, +27.7% is an increase in relation to the fall in the last March. Industrial production in the United States in March showed much modest growth, only 1.4% m/m. However, at the end of last week, the demand for the US dollar did not increase.
On Friday, there was only a report on inflation in the European Union, which, following the US, increased to 1.3% y/y. However, this report was not taken into account by the markets. Today, when there were no economic publications at all, the markets increased the demand for the euro, thanks to which it soared up and continued to build the supposed first wave as part of a new upward trend section. From all this, I draw an almost obvious conclusion: the markets do not pay any attention to statistics now. Wave counting in terms of importance is in the first place when forecasting the Euro/Dollar instrument.
Based on the analysis, I still expect the construction of an upward trend. Since its first wave already looks quite convincing, and the attempt to break through the 50.0% Fibonacci level was ultimately successful, now the first wave is still being built with targets located around the 21st figure and above. Therefore, I still recommend buying the instrument. Wave counting still takes precedence over the news background.
The wave counting of the upward trend section is still quite complete, in a five-wave form, and is not going to get complicated yet. But the section of the trend, which began its construction immediately after it, takes on a corrective, but quite understandable form. This part of the trend also looks quite complete.
*Účelem zde zveřejněné analýzy trhu je zvýšení vašeho povědomí, nikoli dávání pokynů k obchodování.
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