The wave counting on the 4-hour chart for the Euro/Dollar instrument has become a little confusing lately and is becoming more ambiguous. However, I identified the last decline in the instrument quotes as wave 4 of the upward trend section. If this assumption is correct, then the increase in quotes will continue with targets located near the 0.0% Fibonacci level, which corresponds to 1.2350 within wave 5. At the moment, wave 3 does not look entirely convincing, if only because it has taken on a shorter form than wave 1. Consequently, the wave counting is currently not 100% unambiguous. However, while the current wave counting is confirmed by the real movements of the instrument, there is no reason to revise it. Therefore, in the coming days, I expect the instrument quotes to continue to rise. If the decline resumes and a successful attempt is made to break through the current low of wave 4, this will be a good enough reason to make adjustments and additions to the current wave counting.
The news background for the Euro/Dollar instrument on Tuesday was extensive and quite interesting. There were quite important reports, and not very important ones. After a rather boring first half of the day, the instrument, like the day before, begins to move much more actively. The first thing to mention is inflation. In the European Union, the consumer price index rose to 2.0% YoY, although markets expected a reading of 1.9% YoY. The unemployment rate in the European Union was also pleasing, which fell from 8.1% to 8.0%. However, these data did not provide much support to the European currency. And what additional support can we talk about if the euro is already near the peak of the previous upward trend segment?
The data from Germany were less positive, but also less important. The unemployment rate remained unchanged at around 6.0%, the index of business activity in the manufacturing sector rose from 64.0 points to 64.4 points. Throughout the European Union, business activity in manufacturing rose from 62.8 points to 63.1 points. Thus, the markets today could increase demand for the European currency from the very morning, but they did it only in the afternoon, when the statistics in the United States were released, which also turned out to be strong, but at the same time did not affect the US dollar. In general, it is completely ambiguous that the markets generally reacted to economic reports today. During their release, there was no strong movement, and the instrument began to rise when there was no news. And a little later, reports were released that were supposed to increase the demand for the US currency.
Based on the analysis, I still expect the instrument quotes to rise, although at this time, I am not completely sure about the wave counting, it can take on a completely different form. Thus, I still recommend buying the instrument with targets located around the 23rd figure and the level of 1.2340 for each MACD signal "up". But now a new decline in quotes (which will not prevent the upward trade, since the MACD will be directed downward) can lead to adjustments and additions to the current wave counting.
The wave counting of the upward trend section is still quite complete. The part of the trend, which began its construction immediately after it, took on a corrective and also fully completed form. If the current wave counting is correct, then the construction of a new upward trend section continues and its first two waves have been completed.