FX.co ★ Analysis of EUR/USD on May 14, 2021. Markets await US retail sales data

The wave counting on the 4-hour chart is still clear and does not require any additions. Looking at the supposed wave 1 as part of the new upward trend section, it becomes clear that the third wave or c is also likely to turn out to be quite extended. A very small wave 2 speaks indirectly in favor of this. Also, the internal waves of the supposed wave 3 do not raise any questions. At this time, waves 1 and 2 in 3 have supposedly completed their construction, therefore, the construction of waves 3 in 3 has begun with targets located up to the level of 1.2350. An unsuccessful attempt to break through the 38.2% Fibonacci level also indirectly indicates that the markets are ready to build a new upward wave. Thus, I continue to expect an increase in the quotes of the Euro/Dollar instrument.

During the past day, the news background for the Euro/Dollar instrument was very weak. There were only a few significant reports in America and nothing in the European Union. Therefore, the instrument spent most of the day in a very limited range, and the market activity was low. Today the situation with the news background may be somewhat different. First, the US retail sales report will be released. Last month, this figure jumped 9.8% on a monthly basis, which is quite logical, since America is vaccinated at a high rate, which relieves tension in society and forces Americans to return to their normal lives. However, by the end of April, the increase in retail sales may already be more modest, and it is not yet clear how the markets will react to this indicator. I believe that a rise in the dollar today is possible, only if the report is much stronger than +1%. Secondly, a report on industrial production will be released, which has not attracted much interest from the markets lately. Consequently, there may not be any reaction to it at all. Third, the University of Michigan Consumer Sentiment Index will be released. Most likely, there will be no reaction to this report either. Thus, the determining moment of the dynamics today will be the report on retail trade in the United States. Even if this indicator turns out to be much better than the markets' expectations, I do not think that the current wave counting will be broken because of it. In the near future, I expect the instrument quotes to continue to rise.

Based on the analysis, I still expect the construction of an upward trend. At this time, the construction of the corrective wave 2 or b, as well as the internal wave 2 in the composition of the supposed 3. Thus, I recommend now to buy the instrument with the targets located near the 23rd figure. There are no reasons to revise the current wave counting yet.

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 part of the trend, which began its construction immediately after it, took on a corrective and fully completed form. If the current wave counting is correct, then the construction of a new upward trend section has now begun and its two first waves have recently been completed.