EUR/USD, H4 time frame:
There is a high possibility that the bearish correction wave 4, which is part of the global impulse, was completed earlier than what was expected in previous reviews. It took a double zigzag form [W]-[X]-[Y], and not a triple one, as assumed.
Therefore, if our hypothesis is right, then the market has been forming the initial part of a bullish wave 5 since the beginning of April, which can take the form of an impulse.
Like all impulses, it will consist of five sub-waves [1]-[2]-[3]-[4]-[5]. It seems that the first two sub-waves from this indicated construction were already done with their development, that is, we are talking about waves [1] and [2].
Now, let's take a look at the marking of the last section of the chart in a smaller time frame.
EUR/USD, H1 time frame:
Looking at the hourly time frame, it shows the internal structure of the upward impulse wave [1]. It is a bullish five-wave impulse consisting of sub-waves (1)-(2)-(3)-(4)-(5). The last sub-wave (5) took the form of the final diagonal 1-2-3-4-5.
According to Elliott's diagonal rules, the second wave does not go beyond the end of the first wave, and the fourth wave ends between the ends of the first and second waves. Another rule is that all five waves are corrective. If we look at the structure of our wave (5), these rules can be traced, that is, all waves are corrective, and we see the end of wave 4 between the ends of waves 1 and 2.
It is possible that the descending wave [2] is also already done with its pattern. It has the formation of a simple three-wave zigzag (A)-(B)-(C).
In the near future, market participants may expect a price growth and the development of an impulse wave (1), consisting of sub-waves 1-2-3-4-5, which will initiate a larger impulse [3].
The end of wave (1) is expected at the level of 1.2254, from which the bundle wave [X] of the bearish correction 4 was completed.
Currently, opening buy deals can be considered in order to take profit at the high of 1.2254.
The material has been provided by InstaForex Company - www.instaforex.com