Wave pattern:

The wave pattern of EUR/USD over the past week has remained nearly the same, although it has taken on a much more complex and extended form than I originally expected. However, beginners should remember that nothing develops quickly and simply. Looking at the 4-hour chart, the current wave structure is expected to be completed in about two weeks. In the future, I will also analyze lower timeframes to find good short-term trading opportunities. For now, we are dealing with an already formed situation.

In the chart above, I deliberately did not change my graphical forecast from August 26. As we can see, the price keeps pulling back downward, but still gradually moves upward. This week the news background will be very strong, so one must keep in mind the potential conflict between news and the wave pattern. I want to remind you that if the news background turns strongly in favor of the U.S. dollar, demand for it will rise, which could disrupt the current trading plan and complicate the larger-scale wave pattern.

I had suggested buying at 1.1617. At the moment, quotes are at 1.1665 and are falling sharply. Something happened this morning either globally or in the U.S. that triggered a sudden increase in demand for the U.S. dollar or a drop in the euro. It is still unclear what it was, since no events were listed in the news calendar for this time. The eurozone inflation report was released later, after the EUR/USD decline had already begun.

This is exactly the kind of situation I mean when I talk about conflicts between the news background and the wave pattern. At any moment, an important event may occur, or Donald Trump may speak, which often stirs the markets. Therefore, beginners must remember that things can go off-plan at any time. Unfortunately, the market is not like a lottery, where you make a bet and nothing else depends on you.

Alternative scenario: a breakout of the lows of waves c and 2, and the formation of a more complex horizontal corrective structure.

Trading recommendations: In the current situation, I can advise beginners to remain in long positions, expecting the development of an upward wave sequence. The target is 1.1922. This target may be adjusted as the current wave sequence develops. A successful breakout below 1.1584 would invalidate the current trading plan. The news background this week will have a strong influence on the wave pattern. I had already advised moving Stop Loss to breakeven in my previous review.

Basic principles of my analysis:

1. Wave structures should be simple and clear. Complex structures are difficult to trade, often take non-standard forms, or transform into other complex structures.
2. If there is no confidence in what is happening in the market, it is better not to enter.
3. Absolute certainty about the direction of movement does not and cannot exist. Always remember to use protective Stop Loss orders.
4. Wave analysis can be combined with other types of analysis and trading strategies.
5. Always remember the news background, which can strongly influence any wave structure.