FX.co ★ Analysis on EUR/USD on September 8: European Parliament to start negotiations for recovery fund for the European Union

The wave marking of the EUR / USD instrument has become quite integral in global terms. The departure of quotes from the reached highs in recent days once again leads to the conclusion that the construction of wave 3 or C is complete. If this assumption is correct, then lowering the quotes will continue with targets placed below the low of wave 4 in 5 in 3 or C within the construction of the assumed wave 4; after which may be resumed the building of upward trend within the wave 5. It is also possible that the entire section of the trend, which begins in March, will take a three-wave form and will be completed around the 1.2011 mark.

A smaller scale wave count shows that the estimated wave 5 in 5 in 3 or C completed its construction. If this is true, then the decline in quotes will continue with targets located near the 200.0% Fibonacci level within the descending wave 4 or, possibly, a new descending set of waves. Wave 4 can take a three-wave form.

On Monday, September 7, neither America nor the European Union had any important news, reports, or information at all. Thus, the low trading amplitude is completely explained by the missing news background. Today, the situation should change a little for the better. The EU will release a report on GDP for the second quarter which does not Bode well for the Euro currency. However, it is worth remembering that this indicator was already published last month. The markets are already familiar with its value and in the US, GDP losses in the second quarter were almost 3 times more. Thus, it is unlikely that additional pressure will be created on the Euro currency today. Unless the GDP report is significantly worse than the previous value.

The chances of building a corrective wave 4 today should not be lost. Despite the complexity of the current situation in America, the US dollar has already fallen quite strongly against the European currency. In Europe as well, everything is not smooth. Europe is not on a separate planet that Covid-19 could not reach. Its economy has also suffered. The 750 billion Euro economic aid package is also yet to be approved by the European Parliament, which has criticized the recovery fund and the seven-year budget for the Euro zone for putting many different programs under funding cuts. Currently, the European Parliament is on vacation but in the next few days it will come out of them and start new negotiations with the European Council on the already changed project of the recovery fund and budget which was agreed with all countries at the EU summit a month ago.

General conclusions and recommendations:

The Euro-Dollar pair presumably completed the construction of a global wave of 3 or C. Thus, at this time, I recommend selling the instrument with targets located near the calculated mark of 1.1571 which corresponds to 200.0% Fibonacci for each MACD signal down. If wave 4 is actually being built at this time, it can take a three-wave form.