The wave counting of the 4-hour chart for the Euro/Dollar instrument remains unchanged. This week, the amplitude of the instrument's movements for each day does not exceed 20-30 basis points. The quotes of the instrument fell below the low of the previous wave, so now we can definitely conclude that the descending section of the trend has transformed into a five-wave structure of the a-b-c-d-e type. If this is true, then the last wave e is either nearing its completion or has already been completed, since the attempt to break through the 1.1704 mark, which corresponds to 100.0% Fibonacci level was unsuccessful. Thus, I expect the beginning of a new upward trend segment in the coming days with the prospect of growth by 500-600 points. The continued exit of quotes from the reached lows indirectly indicates the readiness of the markets for new purchases of the instrument. I consider the option with the resumption of the decline in the quotes of the instrument now as a backup.
The news background for the Euro/Dollar instrument remained extremely weak on Friday. There was not a single report or other events that could interest the markets. However, the instrument still came to life at the end of the week and began to increase, which currently stands at 35 basis points. Although the entire current week remains extremely boring. As I have already said, the news background also remains very weak, but there is still a topic in the US that may reduce the demand for the US dollar in the foreign exchange market in the near future. We are talking about a new wave of the coronavirus pandemic, which began a few weeks ago. At first, it was only a small increase in the number of cases, but in recent days, more than 100,000 new cases have been steadily registered per day.
Moreover, American scientists have announced a new strain of the virus called "iota", which is even more contagious than "delta", which at one time was also considered the most contagious of all known strains. However, the new strain, which is already actively infecting Americans, has an even higher transmission rate, about 25% higher than that of delta. In addition, it is also more likely to cause complications in the patient than all other strains, which can be fatal. For people under 45 years of age, the difference is practically not noticeable, but for elderly people, the new strain is more dangerous by about 60-80%. Thus, despite the fairly high rates of vaccination, the virus continues to spread in the United States, as well as in many other countries of the world, which can lead to a slowdown in the economy and an extension of the duration of incentive programs.
Based on the analysis, I conclude that the construction of the descending section could have ended around the level of 1.1704, which is equal to 100.0% according to Fibonacci. A successful attempt to break through this level will indicate the readiness of the markets for further sales of the instrument. In this case, the wave e may take a more complex and extended form, and it will be possible to sell the instrument with targets located near the 1.1551 mark, which corresponds to 127.2% according to Fibonacci. Until this happens, I recommend buying the pair.
The wave counting of the higher scale looks quite convincing. We see three three-wave sections of the trend, which are approximately the same in size. However, the last section of the trend quite unexpectedly began to take a more complex form, but it can still end in the near future.
