On the four-hour time frame, the wave pattern of the EUR/USD pair remains unchanged for now. And what changes can be if the instrument goes through 30-40 points per day? For the last five days, the instrument has gained about 100 basis points, which gives reason to assume that the formation of the downward trend section is already done. However, 100 points are too little to confidently say about the completion of an entire section. The wave pattern of the proposed wave e looks quite convincing now, but if the markets do not start buying the euro more actively, everything may end up making the downward section more complicated. A successful attempt to break through the 100.0% Fibonacci level indirectly indicates the readiness of the markets to buy. This option is not yet considered due to the complication of the current wave pattern. So, we expect the quotes to rise with targets located around the 19th mark, which corresponds to the high of wave d. However, the instrument can hold to this level for a very long time with the current activity indicators.
There is no news background for the main currency pair today since all the events are scheduled for only one country – the United States. Yesterday, there were a lot of different US reports, but they had practically no effect on the movement of the instrument. However, it should be noted that the US GDP in the second quarter grew by 0.1% since the first estimate and is now estimated at + 6.6% q/q. In addition, the number of applications for unemployment benefits amounted to 353 thousand.
In general, these values are slightly better than the previous ones. As a result, the US dollar could slightly surge during Thursday afternoon, which it did. However, the instrument continues to move at a distance of 30-40 points per day, so it is very difficult to draw any conclusions. Before Jerome Powell's speech begins today, there will be reports in America on changes in the levels of income and expenditures of the US population, and after the speech, the consumer sentiment index of the University of Michigan will be released. In theory, these reports can also influence the market. However, all of them might pass through the prism of what Jerome Powell will or will not say. Therefore, all the attention today is focused on the Fed Chairman. It should also be noted that the reaction to Powell's speech can be very weak or absent altogether, and it can be extremely strong. It is necessary to be ready for absolutely any option.
Based on the presented analysis, it can be concluded that the formation of the descending section could have been completed around the level of 1.1704, which equates to 100.0% Fibonacci. Wave e received a strong five-wave internal structure, so we are still waiting for the beginning of the formation of an upward set of waves. The markets are still holding the instrument above the 1.17 mark, so it is suggested to buy the euro for each upward MACD signal in the hope of building a new upward wave.
The wave pattern of the higher scale looks quite convincing. We see three three-wave sections of the trend, which are approximately the same in size. However, the last section of the trend quite unexpectedly took a more complex form, but it still presumably ended in the same place as the previous three-wave section.