The wave marking of the 4-hour chart for the euro/dollar instrument still does not require adjustments, although wave 4 turned out to be longer than I expected, and now the construction of wave 5 is also delayed. The whole wave structure can become more complicated once again, but any structure can always take a more complex and extended form. 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 continue with the targets located below the 1.0000 mark within wave 5. Wave 5 can take almost any length since wave 4 turned out to be much longer than wave 2 – the waves acquire a more extended form as the downward trend section is built. Nevertheless, I note that the low of wave 5 is below the low of wave 3, so this wave can complete its construction at any time. And with it, the entire downward section of the trend.
Hopes for the ECB are very weak.
The euro/dollar instrument fell by 10 basis points on Tuesday. The amplitude of the movements this week is rather weak, and in general, it is impossible to draw an unambiguous conclusion that the construction of the descending wave 5 is completed or, conversely, continues. I believe that this wave is not yet complete. This is supported by the news background, which has the amazing property of constantly deteriorating the European currency. For several months, the European currency declined because the Fed raised the interest rate, but the ECB did not. Several months – because of the geopolitical conflict in Ukraine and mutual sanctions of the West and Russia. Now, when, it would seem, the European regulator is already ready to tighten monetary policy and fight inflation, a gas crisis in Europe may begin. Every time the euro currency gets certain chances to increase, something new happens that reduces its demand.
The gas crisis in the European Union may begin in the near future. Autumn has already begun, so gas consumption due to heating will gradually begin to increase. Gas is also used in production and the electric power industry. Supplies via the Nord Stream have been stopped, as Moscow cannot maintain the pipeline due to European sanctions. The 80-90% fullness of gas storage facilities in the European Union does not mean anything because these facilities are not designed to provide gas for a long time. The gas shortage can negatively affect industrial production and, as a result, GDP and economic growth. A recession is almost inevitable. An ECB rate hike will put even more pressure on the European economy. These combined factors do not allow the market to increase demand for the EU currency. We saw a slight deviation of quotes from the reached lows, but now the instrument is actively moving towards resuming the construction of a downward trend section. The news background continues to support the demand for the dollar.
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 calculated mark of 0.9397, which is equal to 423.6% Fibonacci, for each MACD signal "down," counting on 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 almost any length, so I think it is best to isolate three and five-wave standard structures from the overall picture and work on them.