Globally, the formation of the wave pattern of the EUR/USD pair is fully complete again. The quotes left the highs recently, which suggest that the formation of wave 3 or C is already completed. If so, then the decline in quotes will continue with targets located below the low of the wave 4 in 5 in 3 or C. It is possible that wave 4 will be built, and after the quotes are completed, the formation of the upward trend section within wave 5 will continue. Moreover, it is possible that the entire section of the trend, which begun in March, will take a three-wave form and will be completed around the level of 1.2011.

At the same time, the wave pattern on the lower chart shows that wave 4 in 5 in 3 or C has taken on a longer form than originally assumed, while wave 5 in 5 in 3 or C has already completed its construction. If the current wave pattern is correct, the quotes will continue to decline with targets located near the 200.0% Fibonacci level. In turn, the markets will prepare for further sales of the euro, considering that the low of wave 4 is broken through.

On another note, the news background from America remains negative – coronavirus, which infected more than 6 million people and killed 185 thousand in US, a 32% economic collapse in the second quarter due to the "lockdown", the upcoming presidential elections, and trade war with China, did not please the markets, which lead to dollar's low demand in recent months. But at the same time, any trend comes to an end sooner or later. Now, we should wait for the downward wave 4 to be formed. After that, everything will depend on the news background. If it improves even slightly for the dollar, then we can expect the upward trend to continue to be formed around 1.2011.

In Germany, retail sales for July were released yesterday. The annual indicator rose by 4.2%, which is better than what was expected, however, the monthly indicator fell by 0.9%, which is worse than the market expectations. In addition, the ADP report was even more disappointing – markets expected 950,000 new employees, but they got 428,000 instead. Nevertheless, the demand for the US currency remained stable the whole day. Therefore, it is believed that the wave pattern is now more important than the news background. Today, there are indices of business activity in the service sector in the US, while retail sales in the EU and business activity. These reports may slightly affect the direction of trading.

General conclusions and recommendations:

Since the euro/dollar pair has already completed the construction of a global wave 3 or C, selling the pair is recommended with targets located near the calculated level of 1.1571 or 200.0% Fibonacci. Now, If wave 4 is currently being built, then it can take on a three-wave form. The quotes, in turn, will continue to decline within the framework of wave c to 4, after an upward pullback.