The wave counting of the upward trend section still has a complete five-wave form. The section of the trend that is formed after it also does not raise any questions yet. If the current wave counting is correct, then the quotes will continue to decline with targets located around 19 and 18 figures. However, there is still a possibility of resuming the construction of the upward trend section or building a new one.
The wave counting on a smaller scale also indicates the completion of the upward trend section. Thus, I still believe that the downward trend segment has begun its construction and its first two waves have already been completed. A successful attempt to break through the 38.2% Fibonacci level indicates that the markets are ready for further euro sales and dollar purchases. Thus, the instrument proceeded to build a new downward wave, and the entire downward trend segment is getting closer to becoming impulsive and extended.
Yesterday was literally full of economic reports, most of which were really important. It is important for understanding the state of the economies of the United States and the European Union, and accordingly, it is also important for the euro and the dollar. It all started with the morning publication of a report on business activity in the services sector of the Eurozone. Its value remained below the key mark of 50.0, therefore, by and large, it was not too important what this value was. But inflation in the European Union frankly pleased the markets. After five months of negative inflation, this indicator finally rose and increased immediately by 1.2%. That is, in January, inflation was 0.9% y/y. It is difficult to say what caused such a jump in the consumer price index, but it should definitely have a favorable effect on the European currency rate.
According to the ADP report on Wednesday, employment in the US private sector increased by 174,000, which exceeded the forecasts by more than three times. This report was supposed to support the American currency. The US service sector PMIs were also strong, above 50.0. Thus, this data should have led to the fall of the instrument. Consequently, in the first half of the day, we should have seen a strong rise in the instrument, and in the second, a strong decline. In practice, we have not seen either one or the other. The instrument, on the contrary, spent the whole day in an ultra-narrow range with a minimum amplitude of no more than 50 basis points, as if mocking the markets. For the euro, this is the usual value of the market activity, but not on the day when so many important data came out. The same applies today. The report on retail trade in the EU did not cause any reaction from the markets, and the report on applications for unemployment benefits in the US will be released a little later, but we can say now that it is unlikely to have any impact on the movement of the instrument.
General conclusions and recommendations:
The Euro-Dollar pair has supposedly completed the upward trend. Thus, at this time, I recommend selling the instrument with targets located around 20 and 19 figures for each new signal of the MACD indicator "down", counting on the formation of wave 3.
