The wave analysis of the 4-hour chart for the euro/dollar remains quite clear. The entire rising segment of the trend, which began its construction last year, took on a complex structure. In the past six months, we have seen only three-wave structures alternating. I have consistently said that I expect the pair around the 5th figure, where the construction of the last upward three-wave began. I stand by my words. The next ascending three-wave structure is complete, so the market has begun to form a declining trend segment.

Theoretically, the trend segment that started on May 31 can assume a five-wave form with an a-b-c-d-e structure, but the chances of this diminish with each passing day. We will likely see another descending wave set, at least a three-wave. The news backdrop needs to be stronger for the euro (and sometimes is frankly weak) to keep its demand consistently high. The unsuccessful attempt to breach the 1.1032 mark, corresponding to 38.2% by Fibonacci, indicates the market's readiness to sell again.

A Boring Monday, A Dull Week

The euro/dollar rate decreased by 40 basis points on Monday. There was no news backdrop today, but this pair movement didn't surprise me, even though on Mondays, we often see low market activity (especially when there's no news). The pair continued its downward wave set, twice failing to breach the 38.2% Fibonacci level (which could have paved the way for constructing a corrective wave or wave e), and surpassed its last low to top it off. As we see, there are more reasons for a decline than growth. And they are significant enough for the demand for the euro to decrease.

We expect several reports in the European Union this week, but I don't expect anything special from them. The most important reports are: GDP for the second quarter, industrial production, and inflation. Let's delve into each of them. GDP always comes in three estimates, and we'll see the second this week. Industrial production matters but isn't the highest priority. Inflation is the most critical report, but we'll again see the second estimate, which won't be decisive in this case. Thus, all three reports are less likely to affect market sentiment. And the market is currently bearish. Consequently, sales are more probable.

General Conclusions

Based on the analysis, the construction of the upward wave set is completed. Targets in the range of 1.0500-1.0600 are entirely realistic, and with these goals, I recommend selling the pair. The a-b-c structure appears complete and convincing. Thus it's finalized. Therefore, I advise selling the pair with targets around the 1.0836 mark and below. The construction of the downward segment of the trend will continue.

On a larger wave scale, the wave marking of the ascending trend segment has taken an extended form but is likely completed. We observed five upward waves, which most likely represent the a-b-c-d-e structure. Subsequently, the pair constructed four three-wave structures: two downward and two upward. Now, it has transitioned to building another descending three-wave structure.