The wave counting on the 4-hour chart for the Euro/Dollar instrument remains rather ambiguous, since at the moment two corrective trend sections have already been built and, most likely, the construction of the third, downward trend, has begun. That is, at this time, not only the corrective waves alternate but also the corrective sections of the trend. Now, presumably, wave a of the new downward trend section has completed its construction. If this is indeed the case, then the instrument proceeded to the construction of wave b, the targets of which can be located 100 points higher. You need to be prepared that wave b will turn out to be about the same size as wave a. After the end of wave b, I expect a new decline in the instrument within wave c, although the entire trend section may take a five-wave form. In general, the current wave counting is beyond doubt. The very nature of the movement of the instrument raises doubts. Corrective structures are always more difficult to work out than impulse structures, and this is the main problem.
The news background for the Euro/Dollar instrument on Friday was weak again. However, the markets nevertheless increased the demand for the European currency, as even those not very important reports that came out, had resistance to the US dollar. The main index of personal consumption expenditures increased in May by only 0.5%, the level of household expenditures did not increase at all (0.0% in May), and the level of household income decreased by 2%. In each case, either the markets expected a higher value, or the value itself turned out to be negative. Thus, despite the low importance of the reports, they still caused the dollar to decline.
In general, everything goes according to the wave scenario described above. The current week can already be considered over, and during it, there were not many important events for the Euro/Dollar instrument. Thus, next week, a decline in quotes may begin within the framework of wave c. This requires that the news background does not contradict the current wave pattern. From the important data next week, I highlight the consumer price index in the European Union and Nonfarm Payrolls in the United States. There will be other reports, but these are the most important ones. Most of the market attention will be focused on the report on the US labor market, as the Fed and Jerome Powell made it clear that the restoration of the labor market is a priority for them. If the report is again worse than market expectations, then the US dollar will not receive the support it needs. But after two weak reports on the number of jobs created outside the agricultural sector, I still expect strong data.
Based on the analysis, I still expect the instrument quotes to go up, but now within the corrective wave b. Purchases of the European currency can be carried out with targets located around the levels of 1.1984 and 1.2051, which corresponds to 50.0% and 38.2% Fibonacci, for each MACD signal "up".
The wave counting of the new upward trend section is not entirely unambiguous, however, at this time, it is presumably completed and has taken on a three-wave form. Thus, now I am waiting for the construction of three downward waves, the first wave may already be nearing its completion, and the second is in the process of its construction.
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