The wave pattern of the EUR / USD pair has remained unchanged in recent days, thereby giving off a signal that the upward part of the trend is complete. Thus, wave 4 should begin to form in the near future, or perhaps it has already begun forming in the chart. A successful breakout from the low of wave 4 will confirm that the markets are ready for a downturn, but until this happens, the upward trend can resume at any moment, which will then take on the form of wave 5.
Meanwhile, the pattern on the lower time frames show that the supposed wave 3 or C may be complete, but until a successful breakout from the low of wave 4 and 5, no definite conclusion can be drawn.
In another note, no important macroeconomic report was released in Europe and the United States on Monday, so the markets focused exclusively on general topics. Leading is the issue on the upcoming US presidential elections, with which Donald Trump, if re-elected as president, said that he will consider ending cooperation with China.
Trump believes that China is treating the US unfairly, making the country lose hundreds of billions of dollars. Moreover, he said that all goods produced by American companies in China can be easily produced in the US as well, so he is seriously considering abandoning business with China. However, other information say that US trade representatives are currently in talks with Beijing on new trade deals.
As for Germany, data on its second quarter GDP was published this morning, which showed slightly less contraction than markets had expected.
General conclusions and recommendations:
Since the EUR/USD pair resumed the construction of the global wave 3 or C, I recommend setting up new buy transactions with targets located near the level of 1.2089, or 323.6% Fibonacci. In addition, wave 5 could already be completed, so if the low of wave 4 is passed, sell transactions should be opened, after the construction of corrective wave 2 or b.
*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.
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