Wave analysis of EUR/USD for July 12. Markets await US and EU inflation data


The wave counting on the 4-hour chart for the Euro/Dollar instrument remains rather ambiguous. Yesterday's departure of quotes from the lows reached suggests that the supposed wave c in the composition of the downward corrective set of waves has already been completed. At least three waves can be seen inside it, which can be a - b - c. If this is true, then the entire downward trend may be completed. In recent months, the instrument has moved only in three-wave structures. However, at the same time, it should be recognized that both wave c and the entire downward section of the trend can easily and simply transform into more complex structures at any time. So far, after their supposed completion, only one small upward wave has been built. Therefore, I still cannot make an unambiguous conclusion about the completion of the descending set of waves. Thus, I believe that it is necessary to wait for confirmation of the completion of wave c, and only after considering buying the instrument. At this time, such confirmation may be a successful attempt to break the supposed wave b in c.

The news background for the Euro/Dollar instrument on Monday was not weak, it was absent. Nothing interesting happened for the Euro or American currency during the day. From the latest news, I can highlight the change in the ECB's inflationary approach and, perhaps, everything. At the moment, more information space is occupied by news regarding the spread of new strains of coronavirus in Europe and a possible new tightening of quarantine measures. On this occasion, US Treasury Secretary Janet Yellen has even managed to express her opinion, who believes that it is extremely important that the fight against coronavirus is equally successful around the world, otherwise, the economies of many countries of the world may never fully recover. Earlier, Christine Lagarde also drew attention to this problem and threat.

Tomorrow, the report on American inflation for June will be released, and on Friday - European inflation. These data can have a significant impact on the market sentiment. Since the current wave counting assumes the construction of an upward set of waves, I will wait for weak statistics from the US and strong ones from Europe. There will also be several speeches by Jerome Powell this week, and a report on retail trade in the United States will be released on Friday. These events can also have a certain impact on the behavior of the Euro/Dollar instrument.

Based on the analysis, I conclude that the construction of the downward wave can be completed. Thus, at this time, I recommend buying the instrument with targets located around 1.1917 and 1.1985, which corresponds to 61.8% and 50.0% Fibonacci, for each MACD upward signal. A successful attempt to break the high of wave b as part of the assumed c may confirm the completion of the entire wave c and indicate firm intentions of the markets to continue buying the euro.


The wave counting of the new downward trend section is not entirely unambiguous, however, at this time, it is presumably completed and has adopted a three-wave structure. Thus, I now expect the construction of a new three-wave upward trend section.

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