27.06.202418:24 Forex Analysis & Reviews: Analysis of EUR/USD pair on June 27th. US GDP disappoints the dollar

The wave pattern on the 4-hour chart for the EUR/USD remains unchanged. Currently, we observe the formation of the presumed Wave 3 within Wave 3 or c of a bearish trend section. If this is indeed the case, the decline in quotes will continue for quite some time, as the first wave of this section completed its formation around the 1.0450 mark. Therefore, the third wave of this trend section should end lower, even if it does not take on an impulsive form.

The level of 1.0450 is the target only for the third wave. If the current bearish trend section takes on an impulsive form, then we can expect a total of five waves, and the euro could well decline below the 1.0000 mark. Undoubtedly, it is currently quite difficult to expect such a development, but there have been plenty of surprises in the currency market in recent years.

An alternative scenario I see now is the transformation of wave 3 or c into a corrective view with five waves of type a-b-c-d-e. Even in this case, the low of Wave 3 or Wave C should be below the low of Wave 1 or Wave A. Therefore, if the construction of Wave e in Wave 3 or Wave C has started now, rather than Wave 3 in Wave 3 or Wave C, the instrument's decline should still continue.

The EUR/USD exchange rate rose by 45 basis points on Thursday, which is almost the strongest movement of the week. Market activity increased after the first important report of the week. Unfortunately, this report came out only in the second half of Thursday. The U.S. economy grew by 1.4% in the first quarter, slightly higher than the previous estimate. However, compared to the fourth quarter of last year, the U.S. economy slowed down from 3.4% to 1.4% every quarter. Therefore, this report is unlikely to be a positive for the U.S. dollar.

The second most important report of the day and the entire week is the change in durable goods orders for May. The indicator rose by 0.1%, which is better than market expectations; however, at the same time, the previous month's figure was revised from +0.7% to +0.2%. Therefore, this report also turned out to be negative for the U.S. dollar. We have observed a consistent decline in demand for the U.S. currency, but the wave analysis still points to the formation of a downward wave and a descending trend segment. Therefore, I expect a decline in quotes toward previously indicated targets. The current week has been corrective. Market activity may increase next week due to important statistics from the U.S.

General conclusions.

Based on the analysis of EUR/USD conducted, a downward wave pattern formation continues. In the near future, I expect the continuation of the formation of a descending wave 3 or c with a significant decline in the instrument. I consider only sales with targets around the calculated level of 1.0462. The internal wave structure of wave 3 or c may take a five-wave corrective form, but even in this case, quotes should decline to the 4-5 figure range.

On a larger wave scale, the presumed wave 2 or b, which in length exceeded 76.4% according to Fibonacci from the first wave, may thus be completed. If this is indeed the case, then the scenario involving the formation of wave 3 or c and a decline in the instrument below the 4-figure level continues to unfold.

Key principles of my analysis:

1. Wave structures should be simple and clear. Complex structures are difficult to play out and often involve changes.
2. If one lacks confidence in the market's performance, it's better not to enter it.
3. There is never one hundred percent certainty about the direction of movement. Remember about protective Stop-Loss orders.
4. Wave analysis can be combined with other types of analysis and trading strategies.