FX.co ★ Wave analysis for EUR/USD on July 7, 2021

EUR/USD, H4 time frame:

A bullish momentum 1-2-3-4-5 is formed for the EUR/USD pair in the long term. Earlier this January, the price completed the development of the middle part of this impulse and began to move within the corrective wave 4.

Correction 4 takes the complex form of a triple zigzag, which was marked with green letters in circles [W]-[X]-[Y]-[X]-[Z]. The first four parts of this formation are fully done. Meanwhile, the sub-waves [W]-[X]-[Y]-[X] have taken the form of simple zigzags.

The final active wave [Z] is currently under development. It has a more complex formation than the previous four sub-waves. Most likely, the wave [Z] will be a double zigzag (W)-(X)-(Y), which will soon come to an end.

Now, let's closely look at its pattern on the hourly time frame.

EUR/USD, H1 time frame:

If we take a closer look at the marking of the double zigzag (W)-(X)-(Y), it can be seen that the sub-waves (W) and (X) are completed. The sub-wave (Y) is still being built, while the sub-waves A and B, the impulse, and the double zigzag were done.

In the last section of the chart, we see how sub-waves [1]-[2]-[3]-[4] form a bearish impulse wave C. To complete it, the final impulse wave [5] is necessary. Its possible internal structure is shown schematically on the chart and is marked with blue sub-waves (1)-(2)-(3)-(4)-(5).

The target, at which the impulse [5] is expected to end, is determined by the previous low. The previously acting wave [Y], which is shown on the four-hour time frame, completed its pattern around the level of 1.1702. Most likely, the price will decline to this level again.

Currently, it is recommended to consider opening sell trades in order to take profit at 1.1702 low.