The wave pattern of the upward trend still has a completed five-wave form. Meanwhile, the trend that has started to form after it, seems to be quite clear. If the current wave pattern is accurate, the quotes will possibly decline to the targets set in the area of 1.1900 and 1.1800. However, the formation of the upward trend may still likely continue or a new trend will occur.
The wave pattern in the smaller time frame also indicates that the upward trend is completed. Thus, I still believe that the formation of the downward trend has already started. In fact, two of its waves have already been completed. However, Wave 3 cannot be identified until the price tries to break through the low of Wave 1. Most likely, only three waves of the downward trend will be formed. After that, the formation of the upward trend will continue, which may further complicate and extend the upward trend.
The EUR/USD pair continues to rise, however, it still cannot break through the low of wave 1. In this case, the quotes may stop declining any time. Once this is over, the formation of a new section of the upward trend will most likely start and the US dollar will come under pressure again. Currently, any significant and sensitive topics were not observed in the EU and the US, but there is still some slight tension caused by the distribution of vaccines and the implementation of contracts by pharmaceutical companies in the EU and Biden's "American Rescue Plan", with an amount of 1.9 trillion dollars in the US.
Apparently, the issue in the EU is already solved. Yesterday, President of the European Commission Ursula von der Leyen, said that AstraZeneca will supply the EU with 9 million doses of vaccine, which is more than previously agreed in the first quarter. She also said that it will be delivered a week ahead of schedule. This news is great for the European Union. The faster the majority of the population is vaccinated, the faster the economy will recover.
In terms of economic calendar, GDP in the fourth quarter will be released, which is expected to decline. This weak GDP data may help the markets decide to further buy the US currency. Meanwhile, Democratic and Republican representatives in the US continue to negotiate on the amount of assistance provided to American businesses, unemployed and all those affected by the pandemic. This is because Joe Biden's "American Rescue Plan" does not suit the size of the Republican senators. Biden and the Democrats are offering a $ 1.9 trillion package, while the Republicans are offering $ 1.3 trillion less.
Overall conclusion and trading recommendations:
The upward trend of the EUR/USD pair is presumed to be finally over. Thus, I now suggest selling the pair with the targets set in the area of 1.2000 and 1.1900 with each new "down" signal from the MACD indicator and taking into account the formation of Wave 3. In addition, I recommend that one should wait for a breakout at the low of the Wave 1 before opening new sales.
