EUR/USD analysis on September 16. Will Fed Chair Jerome Powell support the US dollar?

The wave marking of the EUR/USD instrument in global terms still looks quite convincing. The departure of quotes from the reached highs confirms the assumption that the construction of wave 3 or C is complete. Wave 4 (assumed) takes on a three-wave form, at least it now clearly traces waves 1 and 2 or a and b. Thus, in the near future, a new decline in quotes may begin within the third wave from 4. As I said earlier, the US currency will need a news background to build this wave. Otherwise, the increase in the instrument's quotes will continue, which may complicate the entire upward section of the trend.

The smaller scale wave marking indicates that the intended wave 2 or b has already completed its construction. At least that's what it looks like. If the current wave marking is correct, then the decline in quotes will resume today or tomorrow with targets located near the 23.6% and 38.2% Fibonacci levels. If the instrument's price continues to rise (for example, if Powell disappoints the markets today), the current wave pattern of the instrument may end up to a strong complication.

On Tuesday, September 15, there were few important news and reports. The instrument began a sharp decline in the second half of the day, which is quite difficult to justify with news or reports. The US currency started to be in demand sharply, but the only report from America on industrial production was worse than market expectations, so it could not cause an increase in demand for the dollar. There was no more global news from America either. On the contrary, Democrats and Republicans continue to argue about the size of the financial aid package for the economy and can't arrive at a resolution. With less than a month and a half to go until the election, it seems that both of the country's main parties are focused on the election rather than agreeing on an additional aid package for the economy.

There was no news from the European Union today, and the markets were fully focused on the Federal Reserve meeting, which will end today and its results will be announced immediately. This will happen in 7 hours, but it is already clear that the markets are skeptical due to the falling demand for the US currency. Jerome Powell's speech is very important, as the Fed will most likely not change monetary policy in September. Thus, it is what Jerome Powell says that will determine the demand for the dollar for the rest of today and all of tomorrow. And he can say almost anything. The current state of the US economy is very difficult to assess for non-officials who do not have access to all sorts of spot statistics. Therefore, it is difficult to say whether the economy is recovering at a good pace and whether the Fed representatives are happy with them.

General conclusions and recommendations:

The Euro-Dollar pair presumably completed the construction of the global wave 3 or C and the second corrective wave as part of the trend section that begins on September 1. Thus, at this time, I recommend selling the instrument with targets located near the calculated levels of 1.1706 and 1.1520, which corresponds to 23.6% and 38.2% Fibonacci, for each MACD signal down. I expect to build a descending wave at 4. The potential of this wave is 150 points.