The wave marking of the 4-hour chart for the euro/dollar instrument at the moment still does not require adjustments, although wave 4 turned out to be longer than I expected. The whole wave structure can become more complicated once again, but any structure can always take a more complex and extended form. The construction of an ascending wave has been completed, which is interpreted as wave 4 of the downward trend section. If the current wave markup is correct, then the tool continues to build a descending wave 5. The assumed wave 4 has taken a five-wave but corrective form. However, it can still be considered wave 4. There are no grounds to assume the completion of the downward trend segment yet. A successful attempt to break through the 0.9989 mark, which corresponds to 323.6% Fibonacci, indicates the market's readiness to continue reducing demand for the euro. I expect the decline in the quotes of the instrument will resume with targets located below the 1.0000 mark within wave 5. Wave 5 can take on almost any length since wave 4 turned out to be much longer than wave 2 – the waves acquire a more extended appearance as the downward trend section is built.
Tuesday turned out to be a boring day
The euro/dollar instrument moved again with low amplitude on Wednesday, although there was interesting news for the markets just today. The EU inflation report for August was, of course, Europe's most important event of the day and week. The consumer price index has again accelerated and is now 9.1% y/y. Every month, prices accelerate by 0.5%. Core inflation rose to 4.3% y/y. In almost all cases, market expectations were either lower or the same. Thus, I can say the following: the inflation report has once again disappointed traders. The demand for the European currency began to decline three hours before the report's release, but it began to grow after the release. It seems that the market had anticipated an increase in inflation in advance and worked it out in advance. However, in general, the wave pattern has not changed, and the market reaction to the report has not affected the Euro/Dollar instrument, which has been trading horizontally for almost two weeks.
Nevertheless, the chances of continuing the decline remain quite high. Technically, the downward section of the trend can be completed now since the low of wave 5 is below the low of wave 3. But then why does not the construction of a new upward trend begin? I believe this only because the current section of the trend has not yet been completed. If this assumption is correct, then the decline of the instrument will continue, regardless of the news background. This Friday, one of the most important reports for the market – Nonfarm Payrolls - will be released in the USA. The markets expect that the number of new jobs created in the country will decrease monthly as the Fed actively raises the interest rate, leading the economy into recession. On Friday, the demand for the dollar may fall, but it is unlikely that it will fall for a long time or forever. The departure of quotes from the reached lows looks like an internal corrective wave inside 5.
General conclusions
Based on the analysis, I conclude that the construction of the downward trend section continues. I advise you to sell the instrument with targets located near the estimated 0.9397 mark, which equates to 423.6% Fibonacci, for each MACD signal "down" in the calculation of the construction of wave 5. So far, I do not see a single signal indicating this wave's completion.
At the higher wave scale, the wave marking of the descending trend segment becomes noticeably more complicated and lengthens. It can take on almost any length, so I think it's best to isolate three and five-wave standard structures from the overall picture and work on them.