The wave counting on the 4-hour chart still does not require any clarifications and additions, despite the weak movement in recent days, and the direction has not changed. The demand for the European currency remains sufficiently high, which allows the instrument to still maintain the formation of an upward wave. A successful attempt to break through the 38.2% Fibonacci level caused the supposed first wave to become more complex and lengthened. Inside it, 5 waves are still not visible, so it can take on almost any length of view. Nevertheless, I still look forward to its completion soon and the departure of quotes from the highs reached as part of the construction of the second wave of a new upward trend. Perhaps this will happen today when the Fed will summarize the results of the meeting and report them to the markets. After all, the Central Bank meeting is one of the most significant events for the foreign exchange market.
The news background for the Euro/Dollar instrument was practically absent during the first days of this week. This can be clearly seen from the dynamics of the movement of the Euro/Dollar instrument, which is completely absent, and this can be seen with the naked eye. Thus, the market's main hopes are associated with today's Fed meeting, or rather, with its results. Although the results of the next meeting can be called right now, since the Fed is unlikely to change the QE program in terms of volume or timing, or suddenly raise the key rate. So there shouldn't be any surprises here. If this is true, then everything will depend solely on the speech of Fed Chairman Jerome Powell today. However, I would not expect much here either. Remember, dear readers, how many times there was such a situation when there was no reaction to the Fed meeting at all or it was minimal? In my opinion, quite a large number of times. Most importantly, the markets are not expecting anything new from either the Fed or Jerome Powell. As a result, no matter what Powell says, it is hardly possible to predict his rhetoric now. And even more so, it is hardly possible to predict how the markets will react to his words. Thus, I believe that in the absence of a news background, the wave picture remains the most important tool for analysis, and today, when it is not clear what to expect from Powell at all, it is even more important. Let me remind you that I expect a correction wave to build. Therefore, if the head of the Fed is positive today, the demand for the US currency may increase, which is necessary to build a wave 2 or b.
Based on the analysis, I still expect the formation of an upward trend. Even though the attempt to break through the 38.2% Fibonacci level was successful in the end, I still hope to build a second wave. Therefore, I do not recommend rushing to open new purchases. It is better to wait until wave 2 or b is completed.
The wave counting of the upward trend 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, takes a corrective, but quite understandable form. This part of the trend also looks quite complete.
