The wave marking of the 4-hour chart for the euro/dollar instrument continues to look convincing. The proposed wave 4 took a five-wave form and turned out to be completely different from wave 2. Nevertheless, now this wave is recognized as complete, and the wave pattern does not require any changes. Accordingly, the instrument has started and continues to build the expected wave 5-E. If this assumption is correct, then the decline in the quotes of the euro currency may continue for another one or two months. At the moment, the entire wave structure of the descending trend section looks almost fully equipped, but wave 5-E is likely to also take a five-wave form. If this is the case, then at the moment the construction of only the first wave consisting of 5-E has been completed. Thus, the instrument still has a fairly strong potential for decline. The first target is around 1.0721, which equates to 200.0% Fibonacci. At the same time, much of the instrument will now depend not only on geopolitics but also on gas and oil prices and the further rupture of relations between Russia and the European Union.
French elections - no surprises
The euro/dollar instrument fell by 40 basis points on Monday. But this is if we count from Monday's opening level, and not from Friday's closing level, which was much lower. The most interesting event on Monday was the counting of votes in the French presidential election. As expected, Marine Le Pen and Emmanuel Macron entered the second round. Macron is predicted to win the election. However, even this news was not the main one. Sweden and Finland, according to media assurances, are ready to join NATO this summer. As reported, this decision was made by the countries after the NATO summit last week, which was attended by Sweden and Finland. As stated in Helsinki, "Russia turned out to be the wrong neighbor as we thought," so for the sake of their security, both countries decided to join the alliance, which can be expanded to 32 countries. Let me remind you that Finland has a long common border with Russia, and earlier Moscow repeatedly warned Helsinki against joining NATO, assuring that such a step would inevitably provoke a reaction from the Kremlin.
Yesterday, Vladimir Putin's press secretary Dmitry Peskov said: "NATO is a tool sharpened for confrontation. This is not an Alliance that ensures peace and stability. Further expansion of the Alliance will not bring additional security to the European continent." If we take into account the fact that the aggression of the Russian Federation against Ukraine began precisely because of the desire of the latter to join NATO, then we can assume that the Kremlin will have to conduct at least two more "special operations". One way or another, no matter how the Finns and Swedes strive to protect themselves, such a step can lead to an even greater deterioration of relations between Russia and Europe and lead to new military conflicts. If these countries join the Alliance, NATO bases may be located only 200 km from St. Petersburg, right on the border with Russia, which Moscow, of course, wants to prevent. The situation in Europe is getting worse rather than better.
General conclusions
Based on the analysis, I still conclude that the construction of wave E continues. If so, now is still a good time to sell the European currency with targets located around the 1.0721 mark, which corresponds to 200.0% Fibonacci, for each MACD signal "down". The current wave marking assumes the construction of wave 5-E, which can also turn out to be very long. In the next few days, a correction wave may begin to build, after which I expect a new decline in the instrument.
On a larger scale, it can be seen that the construction of the proposed wave D has been completed, and the instrument has updated its low. Thus, the fifth wave of a non-pulse downward trend section is being built, which may turn out to be as long as wave C. If this assumption is correct, then the European currency will still decline.
