EUR/USD, H4 chart:
After the formation of a large and long upward impulse wave 3 was completed, we saw the development of a downward correction wave 4, which has a simple bearish zigzag form, consisting of sub-waves [A]-[B]-[C].
Both sub-waves [A] and [B] were already fully done with its formation, while [C] is currently forming based on the chart. Now, let's analyze the details of the situation on the hourly (H1) time frame.
EUR/USD, H1 chart:
Here, it shows that wave [C] is a simple bearish impulse that consists of sub-waves (1)-(2)-(3)-(4)-(5).
As part of this impulse, its first four parts were fully completed. Meanwhile, wave (4) finished off in a simple ascending zigzag A-B-C form. At the moment, it can be seen that the market decline in the bearish impulse (5) still remains.
The impulse (5) consists of waves 1-2-3-4-5. Today, a small growth in the correction wave 2 is expected in the area of the level of 1.194. From this level, the value of the entire wave 2 will be 61.8% along the Fibonacci lines from impulse 1.
The correction will be completed at this level, since the second waves often make up 61.8% of the first waves according to statistics.
Once wave 2 is done, the downward movement will resume in waves 3-4-5 to the level of 1.176. Therefore, it is likely to open short positions at the end of wave 2, particularly in the area of 1.194 to be able to take profit on the decline to 1.176.
The material has been provided by InstaForex Company - www.instaforex.com