The wave marking of the 4-hour chart for the euro/dollar instrument still does not require adjustments, but it is undoubtedly becoming more complicated. It may become more complicated more often than once in the future. We saw the completion of the construction of the next five-wave impulse descending wave structure, then one upward correction wave (marked with a bold line), after which the low waves of 5 were updated. These movements allow me to conclude that the pattern of five months ago was repeated when the 5-wave structure down was completed in the same way, one wave up, and we saw five more waves down. There is no question of any classical wave structure (5 trend waves, 3 correction waves) right now. The news background is such that the market even builds single corrective waves with great reluctance. Thus, in such circumstances, I cannot predict the end of the downward trend segment. We can still observe for a very long time the picture of "a strong wave down-a weak corrective wave up." The goals of the downward trend segment, which has been complicated and lengthened many times, can be found up to 90 figures or even lower. At this time, wave 3 of the descending trend section may be built (presumably), but the descending section may also transform into an ascending one.
Any ECB rate hike will not provide strong support for the euro
The euro/dollar instrument moved with a minimum amplitude of only 1-2 dozen points on Monday. Thus, over the past few days, the wave pattern has not changed at all. Therefore, I cannot draw any new conclusions. There is no background news on Monday, which explains the almost zero market activity. A report on European inflation will be released this week, but it will only be on Wednesday. And until Wednesday, the amplitude could remain very low.
As I have already said, it is now extremely important to understand which of the two wave markings (British or European) will change. The pound and the euro are unlikely to move in different directions, but the current markings imply just that. The movements of the last few days do not allow any additions to be made, so anyone can change, and the instrument can move in any direction from the current positions. The market deliberately paused because it did not fully understand whether it should continue selling the euro currency. On the one hand, the news background remains negative for this currency. On the other hand, a downward trend cannot be complicated forever.
I expect the next ECB and Fed meetings to resonate with the market. If many more interest rate hikes are expected from the ECB, then the Fed is slowly approaching the moment when there will be nowhere to raise rates. If the Fed starts signaling that the end of the rate hike cycle is near, the demand for the US currency may begin to decline. This is where I see the chance for the euro.
General conclusions
Based on the analysis, I conclude that the construction of the downward trend section continues but can end at any time. At this time, the instrument can build a new impulse wave, so I advise selling with targets near the calculated mark of 0.9397, which equates to 423.6% by Fibonacci, by the MACD reversals "down." I urge caution, as it is unclear how much longer the overall decline of the instrument will continue.
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 three and five-wave standard structures from the overall picture and work on them. One of these five waves has just been completed, and a new one has begun its construction.
