The wave marking of the 4-hour chart for the euro/dollar instrument at the moment still does not require adjustments. Given the rather strong increase in the quotes of the euro currency, it can be assumed that wave 5 has completed its construction since it is unlikely that the rising wave of the last week is part of wave 5. Thus, the working option is the end of a long downward trend and the beginning of a new, ascending, at least corrective, at least three waves. Since the European currency still does not show strong growth, I cannot say that there will be no more decline in demand for this currency in the near future. The option of constructing a correction section and further resuming the downward one is not excluded at all. The option of complicating the entire downward section of the trend is not excluded, which will take an even more extended form in this case. The news background for the markets remains one of the key factors, so if it gets worse, the demand for the euro may start to fall again. And it may be getting worse, as the day before yesterday showed us. Nevertheless, the wave marking indicates that the market is ready to build at least three waves.
The market has "assimilated" American inflation, now the European one.
The euro/dollar instrument rose by 10 basis points on Wednesday, and the instrument amplitude was very weak, unlike Wednesday. However, by writing this article, the euro currency has returned to Tuesday's low and intends to continue its decline. If the decline continues, the current downward wave will take an even longer form. The more it lengthens, the more chances there are of resuming the construction of the entire downward section of the trend. But for now, I still believe in building at least a corrective upward one. Let me remind you that this week the demand for the US dollar rose sharply against the background of the report on American inflation, which fell from 8.5% to 8.3%. I don't know what, but this report has strengthened the dollar's buyers, who intend to maintain their strategy. However, the third inflation report will also be released this week (the second was in the UK) – in the European Union. It will become available tomorrow, and, it seems, surprises can also be expected from it. Let me remind you that British inflation unexpectedly slowed down, and the reaction to American inflation eloquently indicated that the market did not expect such a value. Markets expect the European consumer price index to rise by 9.1% in August. Considering the two previous reports this week, I don't even want to guess what indicator's value we will see in reality. But still, I will say this: if inflation in the EU grows faster than 9.1%, then an increase in demand for the euro currency will be very likely. If inflation turns out to be lower than last month's value, I will wait for a new increase in demand for the US dollar.
General conclusions.
Based on the analysis, I conclude that the construction of the downward trend section is not completed with a probability of 100%. Sales should be abandoned for a while since, at this time, we have five waves down, and the tool can build a corrective set of waves. I also do not advise you to hurry with purchases since the news background may cause a new drop in demand for the European currency. The FOMC meeting is already next week.
At the higher wave scale, the wave marking of the descending trend segment becomes noticeably more complicated and lengthens. It can take on almost any length, so I think it's best to isolate the three and five-wave standard structures from the overall picture and work on them. One of these five waves can be completed right now.
