The Elliott wave count on the 4-hour chart for EUR/USD has become more complex. On the higher timeframe (bottom chart), the downward trend segment has taken the form of a five-wave structure, A-B-C-D-E, which could be completed at any time, as it appears structurally complete. All the waves in this segment are approximately the same size, so it is considered corrective. If this assumption is correct, an impulsive upward trend segment will begin once the correction is complete, with targets well above the 1.2000 level.

On the lower timeframe (top chart), an impulsive wave sequence is still developing and may belong to wave E on the higher timeframe. If this is indeed the case, the dollar's strengthening is nearing its end, regardless of how much further it rises. The anticipated wave 5 of E has either been completed or is close to completion. In either case, the current wave structure suggests that the downward wave sequence is nearing completion on both charts. News developments and a sharp shift in market sentiment have driven a strong rally in the US dollar, but there are few new reasons for further dollar strength.

The Elections Have Begun, and the Dollar Remains Stable

The EUR/USD exchange rate has barely changed throughout Tuesday, but anything could happen before the end of the day. The market is currently on edge, and any political news from the United States could trigger widespread selling or buying of the US dollar. The US congressional elections began today and will continue late into the night because of time zone differences. The last polling stations will close in Alaska, and the first results are not expected until the morning.

However, some preliminary assumptions can already be made. Given the relatively high voter turnout, political analysts believe that the Democrats will receive the majority of votes. This is something of a tradition in the United States, where the party in power tends to lose political strength and influence in midterm elections. This generally happens because Americans are rarely fully satisfied with the government's performance. Midterm elections therefore provide a good opportunity to rebalance the composition of Congress. There is little doubt that most Americans view Donald Trump's policies, and those of the Republican Party as a whole, negatively. Consequently, the Democrats are likely to receive most of the votes.

On this basis, the Democrats have effectively already secured victory in one chamber of Congress. This means they have gained a degree of political influence. Unfortunately, the US political system grants the president almost unlimited powers, so the Democrats will not be able to fundamentally influence Trump's decisions, even if they win control of both chambers. However, they will have the opportunity to obstruct some of his initiatives and block certain decisions. In fact, as early as January, they could block the Republicans' budget, triggering another government shutdown. A potential Democratic victory should therefore be interpreted as negative for the dollar, as the US government would become more divided and face greater difficulties in making important decisions quickly and efficiently.

General Conclusions

Based on the EUR/USD analysis, the pair appears to remain within the broader corrective trend structure A-B-C-D-E. However, this structure looks complete and may have already reached its endpoint. The current market setup appears favorable not only for buying the euro but also for anticipating a sustained upward trend segment. According to the higher timeframe, the pair is expected to rise to at least the 1.1700–1.1800 level. The failed attempt to break above 1.1126, corresponding to the 50.0% Fibonacci level (bottom chart, higher timeframe), also indicates that the market may be ready to move higher.

The higher timeframe shows a downward trend segment that has taken the form of A-B-C-D-E. The internal wave structure of wave E has developed into a five-wave impulse, but it may already be complete. If this assumption is correct, a new upward trend segment will begin to form.

Key Principles of the Analysis

1. Wave structures should be simple and clear. Complex structures are difficult to trade and often involve changes in the wave pattern.
2. If the market situation is unclear, it is better to stay out of the market.
3. There can never be absolute certainty about the direction of price movement. Do not forget to use protective Stop Loss orders.
4. Elliott wave analysis can be combined with other forms of analysis and trading strategies.