FX.co ★ Wave analysis for EUR/USD on July 22, 2021

EUR/USD, H4 time frame:

From the point of view of wave analysis, a correction is formed on the market for the GBP/USD pair, which forms a large wave 4. It shows that wave 4 consists of three parts – sub-waves [W]-[X]-[Y]. The sub-wave [W] is a zigzag, while the bundle wave (X) is also similar to a simple zigzag. The last sub-wave [Y] has a complex double zigzag formation (W)-(X)-(Y).

There is a possibility that sub-waves (W) and (X) have already been formed, and the last active wave (Y) is under development but is already almost done.

Now, let's take a look at the internal structure of wave (Y), which takes a zigzag form. One can notice an impulse wave A and a bullish correction B. It should be noted that we are currently in the final wave of the five-wave impulse C. Recently, the development of a correction [4] in the form of a triangle has ended, so the price will continue to decline in sub-wave [5] in the near future. Most likely, this downward movement will continue to the level of 1.1700, where the current wave [W] was completed earlier.

Currently, one can continue trading and open short positions in order to take profits at the previous low.