The wave marking of the 4H chart looks quite explicit. The most important thing is that there is no reason to make adjustments to it. The downward section of the trend, which has appeared at the beginning of this year, looks fully completed. Although it is not clear until the end whether it has taken the form of a-b-c or a-b-c-d-e. However, there is no significant difference in it as both markings indicate that the downward section of the trend is completed. Once again, I would like to draw attention to the fact that the wave markup should be as simple and clear as possible, as well as not be ambiguous and require constant additions. Thus, I believe that the downward section of the trend, which originates in early January, is completed. Accordingly, a new upward section of the trend has begun to build, which can take at least a three-wave pattern. If this assumption is correct, then the increase in the quotes continues only within the first wave. There is no sign of the beginning of the correction in wave 2 or b. Thus, a new upward section of the trend can turn out to be extended or even take the five-wave form.
The economic calendar for the euro/dollar pair on Monday was empty. There were no important reports or events to affect the market. Therefore, the pair traded with small changes. On Tuesday, the situation changed. In the morning, data for Germany and the EU sentiment indexes was released. The figures turned out to be negative. However, traders almost ignored this report. Within the first hour after the release of this report, the euro added about 60 pips. The consumer price index itself came in at 2.6% year-on-year. Analysts had expected a rise to 2.5% from 1.7% on annual basis. The core inflation index was expected to accelerate to 1.5%. Yet, the reading amounted to 1.6% on annual basis. Additionally, investors reacted negatively to the growth of inflation. Bears took the upper hand over the US currency. Speculators think that such a sharp increase in the consumer price index is unfavorable for the US economy. Now, traders are waiting for Jerome Powell's speech, who has repeatedly said that he is not going to reduce the QE program and hike key rates in the near future. Yet, these are the main tools that contain rising inflation.
Based on the analysis, a new upward wave is likely to develop. Possibly the first one will be a part of a new upward trend section. A new uptrend trend section is still underway. So, it is too early to talk about the nearest target levels. Nevertheless, I expect the pair to advance at least to the level of 1.1978, which corresponds to 50.0% of Fibonacci. It is recommended to open long positions for each MACD upward signal. In the near future, the proposed wave 2 or b may begin its development. An unsuccessful attempt to break through the 1.1978 level may just lead to the beginning of the construction of a corrective wave.
The wave marking of the upward trend section is quite complete in its five-wave pattern and is not going to become more complicated yet. However, the section of the trend began its development immediately after it takes a corrective, but quite a clear form. This part of the trend also looks quite complete.