The wave layout for EUR/USD continues to look rather confusing. I am inclined to believe that the construction of the assumed wave 4 and the ascending wave 5 will be completed soon. However, it is also possible that the pair will continue to move within the three-wave structure. Therefore, a new wave may be built from the next uptrend section. In any case, according to the current wave pattern, the pair is expected to advance in the course of the week.
A wave layout on a smaller scale also indicates a possible completion of the downtrend that started on October 21. With the recent downward movement, the pair could have formed a C wave within the three-wave structure. As I mentioned in my previous analysis of the 24-hour time frame, the pair can form a new ascending three-wave pattern or resume the uptrend within the global wave 5. In any case, the current wave should signal a rise in the quotes above the peak of the previous A wave, that is, above the 19 mark.
The American currency finished last week trying to resume the formation of an ascending wave. This signals the increased demand for the European currency and low demand for the US dollar. Over the past few months, the topic of the US presidential election has been high on the agenda since a lot will depend on the election outcome. Now it is clear that Joe Biden has won the election. Donald Trump, on the other hand, continues to accuse Democrats of fraud and vote count falsification. However, most of the courts refused to consider his claims. It seems that this political issue is finally resolved, and the US dollar can now breathe freely. Yet, this is far from reality. Thus, more than 150,000 new daily coronavirus are recorded in the US. The total number of deaths has already reached 250,000. This is hardly surprising as the country's president has previously refused to introduce a lockdown. Besides, numerous rallies and candidates' speeches have been held in recent weeks before the election. This means that many Americans could have neglected social distancing rules as well as personal protective measures. In short, the US is now truly the hotbed of COVID-2019. Therefore, the US currency cannot be in demand in such a difficult epidemiological situation. The Eurozone is also facing a challenging time. So, the EU authorities have approved the introduction of a second lockdown. Thus, the virus should gradually recede and there are hopes that the second coronavirus wave will end in the short term. In the US, however, everything is just the opposite. The authorities of different states are tightening quarantine measures, but this is clearly not enough to stop the exponential growth of the infection.
Conclusion and trading tips
EUR/USD has supposedly completed the formation of the three-wave downtrend section. At present, I would recommend buying the pair with the targets located near 1.2010, which corresponds to 0.0% Fibonacci, whenever the MACD indicator generates buy signal. Keep in mind the formation of the C wave. The assumed B wave seems to have completed its formation.