EUR/USD, D1 time frame:
First of all, we are interested in what can be expected from the EUR/USD pair in the coming trading weeks. To understand this, let's look at the daily time frame and try to determine which waves are currently forming.
It is very possible that there is a construction of the wave of the bundle [X], consisting of three sub-waves (A)-(B)-(C). The first two parts are completed, while wave (C) is still being formed. This wave includes sub-waves 1-2-3-4-5, in which wave 4 is currently developing.
In order to know where wave 4 might end, let's consider the Fibonacci lines, which predict the end levels of the waves fairly accurately. We take the impulse wave 3 as 100% and measure the correction value 4 relative to it.
Since the fourth wave is being formed, let's turn to the statistics and see at what level this wave most often ends. The statistics say that the 4th wave most often ends, with 38.2% on the Fibonacci lines from wave 3.
This is the reason why the full completion of wave 4 is likely near the level of 1.172. Now, let's take a closer look at the situation.
EUR/USD, H4 time frame:
It is shown in the four-hour time frame that the emerging wave 4 is taking the form of a triple zigzag. Such a wave consists of three zigzags [W], [Y] and [Z], which unite the bundle waves [X] and [X].
At present, the first four parts of this triple zigzag are already done. Thus, what remains only is the formation of the last, final wave [Z] of this structure. The decline in this wave has already begun.
The wave consists of sub-waves (A)-(B)-(C). Wave (A), which is currently being built, may end near the level of 1.187 (previous low) formed by the blue wave (X). Let's look at the structure of wave (A) on the hourly time frame.
EUR/USD, H1 time frame:
Like all impulses, wave (A) consists of five waves, which is marked with numbers 1, 2, 3, 4, 5. We can assume that impulse 1 has been fully done, so the correction 2 is now being formed. The correction 2 is likely to be completed at the level of 1.208, since the value of the entire correction 2 will be 50% of wave 1 at this level.
According to the theory of wave analysis, the second waves are usually between 50% and 76.4% in magnitude from wave one. In this case, the minimum coefficient was chosen, as the sharpness of the decline suggests that the upward correction will not be deep, since bears have much more strength than bulls in this case.
Based on this, it is suggested to sell at the end of the upward correction 2 in the area of 1.208. Take profit can be placed at the end of the entire downward impulse (A) in the area of the level 1.187. It is also possible to open additional short positions as the marking is confirmed and the market declines in the impulse wave 3.
