The wave marking of the 4H chart for the euro/dollar pair continues to remain integral. It does not require any changes. At this time, the construction of the proposed wave C is underway, which is likely to take a five-wave form. It seems that the construction of an upward wave d in C has been completed. If the current wave marking is correct, then the construction of the internal wave e in C is happening now. A successful attempt to break through the 100.0% Fibonacci retracement level indicates the strength of bears and a new wave of sell-off. Thus, the pair is likely to retain its downward movement this week. The target level is located near 1.1152, which corresponds with the Fibonacci retracement level of 127.2%. At this level, the entire trend section may complete its construction. I also draw attention to the fact that wave C takes a corrective form. The entire downward section of the trend, which originated in January 2021, may take not a three-wave but a five-wave form A-B-C-D-E. However, this scenario may come true only if wave C completes its construction.
Traders are anticipating the results of the FOMC meetingThe US released only the retail sales report for November. However, investors almost ignored this data. This is why the main focus is on the results of the FOMC meeting. After the meeting, Jerome Powell will make a speech. Naturally, investors hope to get some hints about the Fed's future plans. Market activity has remained low ahead of the meeting. The trajectory of the pair totaled 10-15 pips. On Monday and Tuesday, the pair remained practically unchanged but the movement was almost horizontal. Thus, no changes were made to the wave pattern. Now, we should await the results and then analyze them. It is possible that the Fed will make other decisions, not the ones that the markets are counting on now. Jerome Powell may announce something unexpected at a press conference that will overshadow the importance of the decision on the QE program. The Fed meeting always triggers uncertainty in the market. Sometimes its content coincides with the market expectations, sometimes it does not. Therefore, it makes no sense to predict how the pair may react to the meeting's results in a few hours or by tomorrow morning. Traders are waiting for hawkish rhetoric and a more aggressive stance so that wave e is likely to continue its construction.
ConclusionBased on the analysis, the construction of the descending wave C is likely to be completed. However, the internal wave structure may show that another descending wave e is being built. Thus, I recommend opening short positions on the pair with the target levels located around the 1.1152 mark for each downward signal of the MACD indicator.
The wave marking of the large timeframes looks quite comprehensive. The quotes keep dropping. Now, the downward section of the trend, which originated on May 25, has taken the form of a three-wave correction structure A-B-C. Thus, the decline may continue for at least a few more weeks until wave C is fully completed (it should take a five-wave form).