The wave counting on the 4-hour chart is still quite unambiguous and looks quite understandable. At the moment, the structure of waves a-b-c-d-e looks fully completed. The alternative wave counting, which assumes a-b-c structure, looks absolutely clear and understandable, which also looks fully complete. Thus, in any case, I now expect the construction of at least three upward wave structures. So far, it is difficult to understand how strong and extended the new structure will turn out to be. Demand for the European currency has been on the rise in recent days, so everything will depend on how long it lasts. I am not considering the option with the complication of the downward trend starting on January 6. However, if the instrument makes a successful breakout of the March 31 low, it may require adjustments to the current wave counting. So far, the wave pattern of the proposed new upward trend section looks like the construction of its first impulse wave.
The news background for the Euro/Dollar instrument is rather weak at the moment. Very few economic events were originally scheduled for this week. Yesterday, for example, the index of business activity for the services sector in Europe was released (increased from 48.8 to 49.6), composite index (increased from 52.25 to 53.2). And the US released a report on the balance of foreign trade, which once again turned out to be weaker than market expectations. On Wednesday evening, the minutes of the Fed meeting were released. The main idea was that the Fed does not intend to change the parameters of monetary policy in the near future, despite the growing profitability of 10-year Treasuries and the high pace of economic recovery. Many market participants expected that the protocol would contain hawkish notes and hints of a possible tightening of monetary policy. But the Fed's monetary committee is still holding its own: monetary policy must remain flexible and stimulating the economy to a large extent for the recovery to continue at the current pace until the economy fully reaches pre-crisis levels. Analysts believe that against the background of such an attitude in the Fed, the US currency will continue to lose demand, as inflation in the US is accelerating, and the regulator is not going to restrain it in any way through monetary policy instruments. After the release of the protocol, the demand for the dollar and the euro did not change, which allows the markets to continue moving along the path of building a new upward trend section. Since the regulator has no "hawkish" notes now, there is no reason to increase the demand for the dollar.
Based on the analysis, I still expect the formation of a new upward wave, possibly the first in a new upward trend segment. I do not see any sense in defining targets so far, since a new trend segment is just emerging. Nevertheless, I expect the instrument to rise to a minimum of 1.1978, which corresponds to 50.0% Fibonacci. It will be necessary to see if a new upward wave will develop. So far, I recommend buying an instrument for each MACD "up" signal.
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.
*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.
InstaForex analytical reviews will make you fully aware of market trends! Being an InstaForex client, you are provided with a large number of free services for efficient trading.