The wave counting on the 4-hour chart for the Euro/Dollar instrument remains rather ambiguous. Yesterday's decline in quotes led to the fact that wave c was recognized as more complex. But today's rise in the instrument quotes is already forcing us to take these words back. The wave counting of the last months is such that any wave and any part of the trend can take any long and complex form. For example, there may be five waves inside the assumed wave c, and there may be several more internal waves inside any of these five waves. But at the same time, wave c can already be completed, since 3 waves are clearly visible inside it, which may be enough for a correction set. In such a situation, I recommend paying attention only to the waves of the higher scale. This, of course, is not the most ideal way to work, but note that wave counts must be understandable and clear so that you can work and earn money using it. Also today, the news background played for the European currency. If not for it, the decline in the euro could have continued, as, for example, the decline in the British currency continued.
The news background for the Euro/Dollar instrument, if not absent, was absolutely not obvious on Thursday. Of the economic reports, only the report on claims for unemployment benefits in the United States was scheduled. However, in addition, today the ECB published a review for the first time in a long time, the purpose of which was to make sure that the monetary policy strategy was in line with the bank's goals. The key change in this very strategy was the approach to inflation and its targeting. Now ECB members believe that the consumer price index may go above 2% for some time, although the target is still 2%.
The goal of this change may be the desire to continue to support the economy with QE and PEPP programs for as long as possible, without regard to inflation, which may continue to rise. A good example now is the United States, where inflation has already risen to 5%. No one in the European Union expects such a serious acceleration yet, but still, this option cannot be completely excluded. In addition, it became known that over the past week, the ECB balance increased by only 21 billion euros, which is much lower than the values of previous periods. This may mean that the pace of asset purchases is slowing down, although earlier Christine Lagarde noted that the ECB is going, on the contrary, to increase asset purchases. Nevertheless, all this news came as a surprise to the markets, and the European currency quite rightly felt a surge of strength due to increased demand for itself.
Based on the analysis, I conclude that the construction of the downward wave continues, but at the same time, it can be completed at any time. Thus, at this time, I recommend selling with targets located around 1.1701 and 1.1552, which corresponds to 100.0% and 127.2% Fibonacci, for each MACD downward signal. A successful attempt to break the high of wave b in the composition of assumed c may indirectly indicate the completion of wave c.
The wave counting of the new upward trend section is not entirely unambiguous, but at this time, it is presumably completed and has taken on a three-wave form. Thus, now I expect the construction of three downward waves, and the third wave can turn out to be almost any in length. At the same time, the trend section can take on a five-wave form.
