The wave counting on the 4-hour chart for the Euro/Dollar instrument continues to remain integral and does not require any changes. However, in order for it to continue to remain so, it is necessary to clarify the current wave count.
Over the past two days, the instrument has added about 150 basis points, so the construction of a downward wave e in C remains questionable. And if this wave does not continue its construction, then wave C will have to be recognized as three-wave and completed. It seems to me that it should take a five-wave form after all.
The wave that originates on November 30 cannot be attributed now either to wave C or to the first wave of a new upward trend segment, if it really is, since neither the peak of wave d in C nor the low of wave c in C were broken. The movement of the instrument is almost horizontal and in the current situation, it remains only to wait for the clarification of the wave marking.
I believe that the Euro/Dollar and Pound/Dollar instruments can start building an upward trend segment at the same time, but for this, you need to determine the wave pattern of the euro currency, since everything looks more or less convincing for the pound.
Fed and ECB have announced plans to phase out bond-buying programsThe news background for the EUR/USD instrument on Wednesday and Thursday was very strong. However, from my point of view, the results of the Fed meeting were more important for the market than the results of the ECB meeting. Although both central banks have declared a reduction in quantitative easing programs for the economy.
The Fed is "hawkish," reducing the volume of purchases in December by $30 billion. The ECB is "dovish," stating that it will continue to reduce the volume of purchases under the pandemic emergency purchase program (PEPP) in the first quarter of next year. Both central banks have announced that they will completely abandon monetary stimulus in March next year. Thus, the decisions taken by both banks are, by and large, identical.
However, both yesterday and today, the European currency is mainly growing. I believe that this is a sign of the readiness of the markets to build at least a new upward wave because the U.S. dollar was also supposed to receive market support. However, as I said, the current wave counting has become a bit more complicated and needs clarification.
A decrease in the quotes of the instrument seems to be a more logical option so that wave C turns out to be a five-wave one. But a successful attempt to break through the peak of wave d in C may indicate the readiness of the instrument to build a new upward trend section.
Unfortunately, the entire section of this year's trend is corrective. This means that its internal wave structure consists only of corrective waves, which can be almost identical in size, which significantly complicates the procedure for identifying the end or beginning of a trend.
General conclusions
Based on the analysis, I conclude that the construction of the downward wave C can be completed. However, the internal wave structure of this wave still allows the construction of another downward, internal wave. Thus, I advise selling the instrument with targets around 1.1152 on every downward signal from the MACD until a successful breakout of the peak of wave d.
The wave counting of the higher scale looks quite convincing. The decline in quotes continues and now the downward section of the trend, which originates on May 25, takes the form of a three-wave corrective structure A-B-C. Thus, the decline may continue for at least a few more weeks until wave C is fully completed (it should take a five-wave form in this case).