The wave counting on the 4-hour chart for the Euro/Dollar instrument remains rather ambiguous. Recently, the instrument has been moving with the help of corrective sets of waves, which can easily take on both three-wave and five-wave forms, but are still corrective. The internal wave structure of each wave of the higher scale is quite complex, and it is extremely difficult to read the wave countings inside it. Thus, I continue to recommend working on the instrument on higher-scale waves, which allow us to draw certain conclusions and assumptions. At this time, the instrument made an unsuccessful attempt to break through the 76.4% Fibonacci level. Thus, the supposed wave c may already be completed. If this is the case, then the decline in quotes may end there and begin building a new upward trend section, which may also turn out to be corrective. At the same time, a repeated successful attempt to break through the 76.4% level will indicate that the markets are ready for new sales of the instrument. In this case, the construction of wave c will continue.
The news background for the Euro/Dollar instrument was quite interesting on Thursday. In the morning, the markets began to receive information that made them think and trade in accordance with it. The unemployment rate in the European Union fell to 7.9% in May, which was perceived positively by the markets, although often this report does not cause any reaction. In addition to this, the President of the ECB Christine Lagarde, in her speech, said that new strains of coronavirus, which are now spreading across European countries, could pose a serious threat to the economy. Let me remind you that earlier Lagarde has repeatedly stated that the European economy continues to need stimulation. This time, however, there was nothing overtly negative in Lagarde's statement. The coronavirus and its new strains are indeed re-spreading across Europe, but to a greater extent, this now concerns the UK and not the EU countries. Nevertheless, the virus, as everyone could already understand, can quite easily cross borders and invade other countries. Thus, this is a truly global issue, not a purely British one.
The European currency has grown slightly after the release of the unemployment report, but now it is important to successfully combine the news background with the wave counting. The Nonfarm Payrolls report will be released tomorrow, which can greatly affect the wave counting. Thus, I recommend making any conclusions as early as tomorrow evening. It is quite possible that the decline in the instrument has not yet been completed, and a successful attempt to break through the 76.4% level will occur tomorrow.
Based on the analysis, I still expect a new decline in the instrument quotes within the expected wave c. The supposed wave b may have completed its construction. Thus, I recommend selling the euro with targets located near the calculated levels of 1.1836 and 1.1704, which equates to 76.4% and 100.0% Fibonacci for each MACD signal "down". A successful attempt to break the 1.1836 mark will lead to an extension of the supposed wave c.
The wave counting of the new upward trend section is not entirely unambiguous, however, at this time, it is presumably completed and has taken on a three-wave form. Thus, now I am expecting to build three downward waves, and all three waves may already be completed. At the same time, the trend section may take a five-wave form.
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