The wave counting of the 4-hour chart for the EUR/USD has undergone certain changes. After the quotes fell below the low of the previous wave, the construction of the downward trend section is resumed. Consequently, it was necessary to make such adjustments that would involve a section of the a-b-c-d-e trend, which was formed from the very beginning of the year. I believe that this section can be considered wave A, and the subsequent increase can be considered wave B. If this is indeed the case, then the construction of the proposed wave C has now begun, which can take a very extended form, given the size of wave A. At the same time, the entire section of the trend may again take the corrective three-wave form A-B-C. Thus, the probability of a further decline in the instrument has increased dramatically, but a week ago this option of wave counting was absolutely unpopular. A successful attempt to break through the 1.1541 mark, which corresponds to 61.8% Fibonacci level, indicates the readiness of the markets for new sales.
The euro continued its smooth decline within the framework of the expected first wave as part of the future A. According to the report, European Union's unemployment rate fell from 7.6% to 7.5% in August. This report, however, did not have any impact on the markets. Meanwhile, America's GDP for the second quarter showed an increase from the previous 6.6% to 6.7% QoQ. The number of claims for unemployment benefits slightly exceeded the expectations of the markets. However, the main decline in the quotes of the instrument happened upon the release of the first report.
Jerome Powell and Christine Lagarde are expected to give a speech at an event organized by the ECB later today. However, note that several speeches by Powell and Lagarde have already taken place this week, and each time it was very difficult to draw a parallel between them and the movement of the instrument. Thus, most likely, we will observe the same picture today - "the dog barks, but the caravan moves on". Nevertheless, the current decline in the euro currency now makes it possible to expect a much stronger downward movement, since the expected wave C can turn out to be very long both in time and in size. Tomorrow, the EU's inflation report and business activity indices in the service and manufacturing sectors will be released. The same indexes will be released in the USA. Friday may be the first day this week when markets will be able to pay attention to economic reports.
Based on the analysis, I conclude that the construction of the downward wave C will continue for some time. Therefore, now I advise selling the instrument for each downward signal from the MACD, with targets located near the calculated marks of 1.1608 and 1.1540, which corresponds to 50.0% and 61.8% Fibonacci levels. The proposed wave C may turn out to be approximately the same size as wave A. At the same time, only one wave is visible inside this wave so far, and it should turn out to be much more complex.
The wave counting of the higher scale looks quite convincing. The decline in quotes continues and now the downward section of the trend, which originates on May 25, takes the form of a three-wave corrective structure A-B-C. Thus, the decline may continue for several more months until wave C is fully completed.
