FX.co ★ Wave analysis for EUR/USD on July 21, 2021

EUR/USD, H4 time frame:

Let's continue to analyze the situation of the EUR/USD pair on the market.

This instrument has been forming a bearish correction 4 for the last six months, which consists of three main sub-waves [W]-[X]-[Y]. The sub-wave [W] is a standard zigzag (A)-(B)-(C) and the wave-bundle [X] also has the form of a zigzag. The last operating sub-wave [Y] is still under development and takes on a more complex internal structure.

It should be noted that wave [Y] takes the form of a double zigzag (W)-(X)-(Y), where the first two parts are already done. The final sub-wave (Y) is still being built.

An inclined triangle (A)-(B)-(C)-(D)-(E) can be observed in the last part of the chart, which has formed a corrective sub-wave [4]. As a rule, the price continues to move in the direction in which it was moving before the development of the triangle pattern after the completion of the inclined triangle.

Therefore, we can expect the price to decline in sub-wave [5], which may end around the level of 1.1700, marked by wave [W].

In the current situation, it is recommended to open short positions from the current level with a take profit at 1700.00.