The wave analysis of the 4-hour chart for the euro/dollar pair remains quite clear. The entire upward trend, which began its construction last year, has taken on a complex structure. In the past six months, we have only seen three-wave structures that alternate with each other. I have repeatedly mentioned that I expect the pair to approach the 5th figure, where the last bullish three-wave structure began. I still hold this view. I believe that another upward three-wave structure has ended, so the market has now begun to build a downward trend segment.
Theoretically, the trend section that started on May 31 could still take a five-wave form with the structure a-b-c-d-e, but the chances of this are diminishing day by day. Most likely, we will see another downward wave set, at least three-wave. At the moment, even the first wave of this set has not yet ended. The news background is weak for the euro and is unlikely to cause an increase in demand this week. Fibonacci levels continue to be overcome one by one, indicating the market's readiness for new sales.
The euro/dollar exchange rate on Monday rose by several dozen points. On the one hand, we saw an increase in euro quotes, but on the other hand, it was too weak to expect the completion of the construction of a downward wave. There was no news background today, and the upcoming interesting events include business activity indices, which will be released this week in the European Union, the United States, Germany, and the United Kingdom, i.e., in all the countries that interest us.
I admit that the demand for the euro may increase slightly this week (although it will depend on the nature of the news background). Nevertheless, the European currency has been declining for more than a month, so a corrective wave is quite acceptable. I want to note that this week in the European Union, there are no events except business activity indices. Only on Friday will Christine Lagarde speak at a symposium in Jackson Hole. However, unlike other analysts, I don't consider this event important. Lagarde's speeches are always interesting, but we shouldn't expect much from the ECB president now. She will not announce a decision to pause three weeks before the next regulator's meeting. Therefore, at best, the markets will hear only general phrases and maybe a couple of hints at the ECB's future decision. However, recently Lagarde has repeatedly noted that the interest rate hike is not yet over.
Overall conclusions:
Based on the analysis conducted, I conclude that the construction of the upward wave set is completed. I still consider targets in the range of 1.0500-1.0600 to be quite realistic, and I advise selling the pair with these targets in mind. The a-b-c structure appears complete and convincing, and therefore, it is finished. Therefore, I continue to advise selling the pair with targets around the 1.0836 mark and below. I believe that the construction of the downward trend segment will continue, and a successful attempt at 1.0880 indicates the market's readiness for new sales.
On a larger wave scale, the wave markup of the upward trend segment took on an extended form, but it is likely completed. We saw five waves up, which most likely represent the a-b-c-d-e structure. Subsequently, the pair constructed four three-wave sets: two down and two up. Now, it has likely entered the stage of building another downward three-wave structure.
