The wave analysis on the 4-hour chart for the euro/dollar pair remains unchanged. Over the past year, we have seen only three wave structures that constantly alternate with each other. Currently, the construction of another three-wave structure continues, which is bearish. The presumed wave 1 is complete, but wave 2 or b has become more complex three or four times, and there are no guarantees that it will be simple.
Although the news background cannot be considered "supportive of the European currency," the market consistently finds new reasons to increase demand for the pair. This situation is not normal. Even if the upward segment of the trend resumes, its internal structure will become completely unreadable.
The internal wave analysis of the presumed wave 2 or b has changed. Since the last downward wave turned out disproportionately large, I now interpret it as wave b. If this is indeed the case, wave c is currently being built, and wave 2 or b may still end at any moment (or may already be completed). The current retreat of quotes from the highs looks convincing, so we can expect a transition to the construction of wave 3 or c.
The market is still not ready for selling.
The exchange rate of the euro/dollar pair remained unchanged throughout Monday. I have observed horizontal movement for over a week, which can easily be a corrective wave before the new impulsive wave 3 or c forms. Therefore, it is okay to abandon the main scenario prematurely. I remind you that it implies the construction of a bearish wave 3 or c with the prospect of a decline to the 1.4 figure.
Unfavorable news continues to come from the European Union. I can't say that every report from the EU fails every time, but I haven't seen any genuinely positive data for a long time. Today, for example, the final estimate of Germany's GDP for 2023 showed a 0.3% decline. It may not be a lot considering the ECB's rate hike, but at the same time, economic growth in the US is much stronger, and the Federal Reserve's interest rates are much higher. However, all this information does not currently support the US currency. I still hope that the market will eventually take this fact into account.
At the same time, industrial production in the European Union declined by another 0.3% in November, with annual volumes down by 6.8%. This is a significant decrease. Practically everything now points to the construction of bearish wave 3 or c. The market may still need to be ready for it, but time passes, and the pair must stay active.
General Conclusions:
Based on the analysis conducted, the construction of a bearish wave set continues. The targets near the 1.0463 level have been ideally achieved, and the unsuccessful attempt to break through this level indicated a shift to the construction of a corrective wave. Wave 2 or b has taken on a completed form, so I expect the formation of an impulsive downward wave 3 or c soon with a significant decline in the pair. The unsuccessful attempt to break the 1.1125 level, corresponding to 23.6% Fibonacci, indicates the market's readiness for selling.
On a larger wave scale, it is visible that the construction of a corrective wave 2 or b is continuing, which, in length, is already over 61.8% Fibonacci from the first wave. As I have already mentioned, this is not critical, and the scenario with the formation of wave 3 or c and a decline in the pair below the 1.4 figure is still valid.
