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Wave analysis of EUR/USD for July 5. Nonfarm Payrolls report did not support the dollar


The wave counting on the 4-hour chart for the Euro/Dollar instrument remains rather ambiguous. The instrument continues to move mainly with the help of corrective sets of waves, so the trend segments of about 500 basis points simply alternate. In the same way as the corrective waves themselves alternate. I have already said that the internal wave counting of the last downward trend looks very difficult. At the same time, it is absolutely normal when the internal wave counting of the higher corrective wave takes on a hard-to-read form. Note that the most important thing in wave counting is not its accuracy and the ability to designate each wave with a specific symbol, but to capitalize on this markup. Thus, at this time, the wave pattern of the last segment of the trend looks like this, as if it had already completed its formation. At the same time, wave a turned out to be long and confusing, and wave c-short and simple. The instrument made an unsuccessful attempt to break through the 76.4% Fibonacci level, which also indicates that the markets are not ready for new purchases of the US currency. Thus, before a successful attempt to break through the 1.1835 mark, I am inclined to build a new upward trend section.

The news background for the Euro/Dollar instrument was quite strong and interesting on Friday. But on the other hand, the markets could interpret it in different ways, and it seems that they did just that. To begin with, there were no important economic reports in the European Union on Friday, and several in the United States at once. Of course, the most interesting was the Nonfarm Payrolls report, from which many expected a strong value since earlier last week the ADP report turned out to be quite strong. In general, the last two Nonfarm reports turned out to be weaker than market expectations, so now almost everyone expected the actual value to be strong. And so it happened. The number of new jobs created outside agriculture amounted to 850,000, while the markets expected 650,000-700,000. However, the US currency, which continued to grow before the release of this report, began to decline after the report was released.

From my point of view, this market behavior is very strange. Even though the unemployment report turned out to be worse than the markets expected, nevertheless, the data on Nonfarm is much stronger and more important. But thanks to an unsuccessful attempt to break through the level of 76.4% and the departure of quotes from the lows reached, a new upward trend section may begin. On Monday, the news background was practically zero. One could only pay attention to the report on business activity in the service sector of the European Union, which only slightly exceeded market expectations (58.3).

Based on the analysis, before a successful attempt to break through the 76.4% Fibonacci level, I now expect the formation of a new upward set of waves. Probably also three-wave. Thus, at this time, I recommend buying the instrument with targets located around 1.1985 and 1.2051, which corresponds to 50.0% and 38.2% Fibonacci.


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 expect 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.

The material has been provided by InstaForex Company -