The wave analysis of 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. At the moment, the construction of another three-wave structure - a downtrend - is continuing. The presumed wave 1 is completed, and wave 2 or b has complicated three or four times, but at the moment, it can still be considered conditionally completed, as the pair's decline has been ongoing for over a month.
The upward trend segment may still resume, but its internal structure will be unreadable. I remind you that I try to highlight unambiguous wave structures that do not tolerate dual interpretation. If the current wave analysis is correct, the market has moved on to forming wave 3 or c. A successful attempt to break through the level of 1.0788, corresponding to 76.4% according to Fibonacci, once again confirmed the market's readiness for sales. Now the nearest target is the level of 1.0637, which is equivalent to 100.0% according to Fibonacci. But even at this point, I do not expect the end of the decline in the euro. Wave 3 or c should be much more extensive both in terms of time and goals.
The beginning of the new week remained with the sellers.
The euro/dollar pair's exchange rate fell by another 10 basis points on Tuesday. Undoubtedly, this is very little, but it is noteworthy that the market did not start to take profits on short positions, so there was no deviation of quotes from the reached lows. This, in turn, indicates that the market is ready to sell the euro and continue doing so. It cannot do this every day due to the peculiarities of the EUR/USD pair. Movements in this pair have always been relatively weak. But at the same time, there is a trend, and it persists. And this trend tells us that the decline will continue.
Today, another set of reports came out in the European Union. Retail trade volumes declined by 1.1% in December every month and by 0.8% on an annual basis. The market expected a decline, but not so strong. Therefore, once again, I can only say that European statistics have disappointed traders. And since European reports continue to disappoint, it is difficult for the market to start increasing demand for the euro. Especially after last week's events when the Fed took a rather hawkish position, and the US labor market showed its strength.
Based on all of the above, I believe that the decline in the European currency will continue. On Tuesday, the market took a short pause, but there are many days and many opportunities ahead. A successful attempt to break through the level of 1.0788 also indicates the market's readiness for sales. There is nowhere to wait for help from the euro because European statistics come out weaker every time than the market expects, and the ECB is no more hawkish than the Fed.
General conclusions.
Based on the analysis conducted, I conclude that the construction of a bearish set of waves continues. Wave 2 or b has taken a completed form, so in the near future, I expect the continuation of the construction of an impulse descending wave 3 or c with a significant decline in the pair. An unsuccessful attempt to break through the level of 1.1125, which corresponds to 23.6% according to Fibonacci, indicated the market's readiness for sales a month ago. I am currently considering only sales with targets near the calculated level of 1.0462, which corresponds to 127.2% according to Fibonacci.
On the higher wave scale, it can be seen that the presumed wave 2 or b, which in length is already more than 61.8% according to Fibonacci from the first wave, may be completed. If this is indeed the case, then the scenario with the construction of wave 3 or c and a decline in the pair below the 4-figure mark has begun to be implemented.
