The wave counting of the 4-hour chart for the Euro/Dollar instrument remains unchanged for the time being. The decline in quotes over the past three days, including today, amounted to only 40 basis points. That is, the decline in quotes is weak, but the assumed wave e still took a five-wave form and continues its construction. A successful attempt to break through the 100.0% Fibonacci level allows us to expect a continuation of the decline in quotes but does not allow us to assume an even greater complication of the downward wave e. This wave now looks quite convincing, so the construction of a corrective set of waves suggests itself. However, the instrument has already made one unsuccessful attempt to break through the 100.0% Fibonacci level from below, which showed that the markets are not ready to buy the euro currency. It turns out that the markets are tired of moving the instrument down, but do not have the strength to move it up. The amplitude yesterday was 25 basis points, today – 13.
The news background for the Euro/Dollar instrument was again zero on Friday. During the day, nothing was interesting in Europe nor the US. Thus, it is not surprising that the amplitude of movements on Friday is 13 points. The day is not over yet, perhaps the markets will still take a couple of active actions. However, I want to note something else. Now the situation with the instrument is "neither here nor there", as the common people say. The instrument cannot continue to decline, but at the same time, it cannot begin to increase. So it turns out that the instrument is slightly reduced by 20-30 points per day, but these movements are very difficult to identify, although their belonging to the wave e is not in doubt. As a result, the wave counting indicates that the instrument is ready to build not just a new upward wave, but a new upward section of the trend. And the news background at the same time regularly supports the US currency. The markets, in turn, are waiting for new speeches by Jerome Powell, the symposium in Jackson Hole, as well as a new meeting of the Fed to find out when the regulator is going to complete the asset purchase program. This is now one of the key issues for the entire foreign exchange market. If a positive response is received, the US dollar may rise even more, which will inevitably lead to a complicated wave counting. However, so far there is no specific information on the QE program and its timing. Thus, the dollar is not retreating backward, but it is also moving forward with difficulty.
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. A successful attempt to break through the 100.0% Fibonacci (1.1704) will indicate the readiness of the markets to buy the instrument. If the markets find the strength to keep the instrument above the 17th figure, then I advise you to buy euros for each MACD signal "up" in order to build a new upward set.
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 began to take a more complex form, but it can still end in the near future.
