The wave counting on the 4-hour chart still does not require any clarifications or additions. On Friday, the instrument lost about 100 basis points, but at the same time, it is impossible to make an accurate conclusion about the completion of the construction of the supposed first wave of a new upward trend. The internal wave pattern of this wave looks very confusing since the internal waves are hardly visible. Accordingly, it is very difficult to conclude whether the necessary 5 internal waves were built and how many elongations were inside them. Thus, Friday's decline in the instrument quotes can be quite calm as either wave 2 or b, or an internal corrective wave of 1 or a. Therefore, I am now awaiting clarification of the situation. This may take several days. I have already said earlier that wave counting should be as simple and unambiguous as possible so that it can be worked out and profitable.
Friday was quite an interesting and fun day. Markets, as if sensing that nothing good should be expected from European statistics, began to reduce demand for the euro in the morning. At the time of the release of three important reports at once, the European currency had already decreased by several dozen points. Thus, when the statistics became known, the decline in the instrument's quotes simply continued. Markets were correct in their conclusions, as inflation accelerated after April, but core inflation declined. GDP contracted 0.6% QoQ in the first quarter, while the unemployment rate fell slightly but remained very high. If we take a closer look at all the reports, then they can be interpreted in a completely different way, but the most important report on GDP, which reflects the pace of recovery of the European economy, of course, disappointed the most, although the markets were expecting an even weaker reading. Thus, the words of Christine Lagarde, who previously compared the European economy with a patient who can only stand on his feet with the help of two crutches, turned out to be pure truth. The European economy contracted again in the first quarter, so it is not recovering at this time, unlike the US. Although in the long term this factor does not worry the markets too much, on Friday they nevertheless took this moment into account. Thus, given the imminent construction of the corrective wave 2 or b, it looks like a whole group of factors coincided in time and the decline on Friday is indeed a corrective wave. The reports from the United States on the personal expenses and income of Americans did not change anything. The European currency also continued to decline, while the dollar continued to rise, which was not the case for about a month.
Based on the analysis, I still expect the construction of an upward trend. At this time, it seems that the formation of a corrective wave 2 or b has begun. Thus, I recommend waiting for the completion of the construction of this wave or the clearing of the wave counting before opening new trades.
The wave counting of the upward trend section still has a fully completed five-wave form and is not going to get complicated yet. But the section of the trend, which began its construction immediately after it, takes on a corrective, but quite understandable form. This part of the trend also looks quite complete. If the current wave counting is correct, then the construction of a new upward trend has now begun.