The wave marking of the EUR/USD instrument in global terms still looks quite convincing in everything that concerns the upward section of the trend, which presumably ended with wave 3 on the first of September. After September 1, problems started. Wave 4 (assumed) first took a three-wave form, but the decline in quotes in recent days led to a breakdown of the previous low. Thus, the entire wave that originates after September 1 takes on a more complex and extended form and may even be not wave 4, but the first wave as part of a new downward trend section.
The wave marking of a smaller scale shows that two smaller waves have already been built inside the assumed wave 4 , and the assumed wave 3 in 4 is currently being built, and smaller-scale waves are also being viewed inside it. The entire downward wave, which began its construction on September 1, does not look like an impulse wave. If this assumption is correct, then we are now seeing the construction of wave 4, which takes a complex and extended form. A successful attempt to break through the level of 23.6% suggests that the instrument is ready for further decline.
European problems lie, as they say, "on the surface". European officials like to talk about them. One of the most important problems of the Eurozone at this time is the high exchange rate of the euro. The ECB believes that the high euro exchange rate is putting pressure on inflation, which has gone into negative territory in recent months. Without inflation, economic growth is impossible, so the ECB is sounding the alarm. The problem is that the ECB has almost no room for maneuver. The key rate is already at 0.5%, and it makes no sense to lower it further. The PEPP and standard QE programs have already been expanded to trillions of values. Of course, the ECB can expand them even more, but this is an extreme measure. In addition, many countries in the Eurozone are experiencing new outbreaks of coronavirus infection, which can not but frighten the European Parliament and the ECB. New quarantine measures is possible which will again negatively affect the country's economy.
US Fed Chair, Jerome Powell, also focused on the pandemic, concluding that the economy is recovering at a high rate, but business activity, economic activity, the unemployment rate and the state of the labor market are at levels much lower than before the crisis. Powell called on the US Congress to approve and provide a new package of financial assistance to the economy. He also said that the pace of economic recovery and its scale will depend entirely on the government's actions in countering the pandemic, as well as supporting the economy. Powell is again expected to address Congress on Wednesday and the Congressional Banking Committee the following day. Perhaps there will be new information.
General conclusions and recommendations:
The Euro-Dollar pair presumably completed the construction of the global wave 3 or C and the second corrective wave as part of the trend section that begins on September 1. Thus, at this time, I still recommend selling the instrument with targets located near the calculated levels of 1.1706 and 1.1520, which corresponds to 23.6% and 38.2% Fibonacci, for each downward signal of the MACD indicator.
