The wave analysis of the 4-hour chart for the euro/dollar remains quite clear. The entire ascending trend segment, which began its formation last year, has taken on a complex structure, and in the last six months, we have seen only three-wave structures alternating with each other. Recently, I have repeatedly stated that I expect the pair to near the 5-figure mark, from which the latest upward three-wave trend began. I stand by my words. The next ascending three-wave structure is complete, so the market has begun constructing a downward trend segment.
Theoretically, the trend segment that began on May 31 could take on a five-wave shape with an a-b-c-d-e structure, but it's hard to say now. The news background needs to be stronger for the euro (sometimes outright weak) to ensure consistently high demand, and economic data from the European Union remains mediocre. The unsuccessful attempt to break the 1.1032 mark, corresponding to 38.2% on Fibonacci, may indicate the market's readiness to sell again.
The dollar isn't eager to continue Friday's decline.
The euro/dollar rate decreased by ten basis points on Monday. Throughout the day, the dollar and the euro were in high demand, but by the end, neither currency had an advantage. Today's movements warrant a closer look. First, for most of the day, there was a retreat from the highs reached on Friday. I want to remind you that of the three US reports on Friday, only one was below market expectations - Nonfarm Payrolls. For instance, the unemployment rate in June was better than expected, but demand for the US currency still decreased. This suggests that the market needed to reflect all the statistics from America properly. If the dollar fell on Friday, it should have increased on Monday. A strong rise in the US currency didn't happen, but importantly, the demand for it didn't continue to drop.
Second, the unsuccessful attempt to break through the 38.2% mark on Fibonacci. The pair failed to break through, essentially the first mark on its upward path toward constructing a corrective wave. Remember, both wave patterns currently allow for the construction of a corrective wave, but how to build it if demand for the pairs isn't growing? The failed attempt to break 1.1032 indirectly indicates a possible resumption of a decline in quotes, and the corrective wave will be constructed later.
Third, industrial production in Germany again lost volume, falling short of market expectations. This week, there have been no reports that would have increased the demand for the euro.
Based on the analysis, I conclude that the construction of the ascending wave sequence has been completed. Targets in the range of 1.0500-1.0600 are quite realistic, and with these targets, I recommend selling the pair. The a-b-c structure appears comprehensive and convincing, and a close below the 1.1172 mark indirectly confirms the formation of a downward trend segment. Therefore, I advise selling the pair with targets around the 1.0836 mark and below. The construction of the downward trend segment will continue.
On a larger wave scale, the wave pattern of the upward trend segment has extended but is likely completed. We saw five upward waves, which are most likely the a-b-c-d-e structure. Subsequently, the pair constructed four three-wave segments: two downward and two upward. It is likely transitioning into the construction phase of another downward three-wave structure.