Globally, the wave pattern of the EUR/USD pair still looks quite convincing with everything related to the upward trend, which supposedly ended with wave 3 on September 1. After September 1, the supposed wave 4 began its formation, which took a three-wave form at first, but the recent decline of the quotes led to a breakdown of the previous low. Thus, the entire wave starting takes on a more complex and extended form and may even not be wave 4 , but the first wave in a new downward trend section.
The wave pattern in the smaller time frame shows there were already two smaller waves built inside the assumed wave 4. In turn, the assumed wave 3 or C in 4 is currently being built, within which smaller waves are also being seen. The entire downward wave, which began its construction on September 1, does not look like an impulse wave. If this assumption is correct, then we are now seeing the construction of wave 4, which takes a complex and extended form. Moreover, a successful attempt to break through the level of 23.6% suggests that the pair is ready to further decline.
Today, it is suggested to ignore the economic background, since a lot of blocks of information have been written in recent days. Jerome Powell and Steven Mnuchin are speaking to Congress almost every day this week. However, judging by the movement of the instrument, the markets are not particularly impressed with the first speeches. Mostly, both chapters did not announce any new information. Powell talks about the high risks to the economy associated with the coronavirus in almost every speech. The same applies to the new package of financial assistance to the most affected sectors of the economy, as well as to unemployed Americans.
Meanwhile, the US presidential election is approaching which will be held on November 3. This will be the main topic in America in recent months, since everyone predicts that there will be incidents during the process of elections. Donald Trump, whose political and approval ratings are unsatisfactory, has openly stated that he cannot guarantee a peaceful transfer of power to his successor if he loses the election. This means that the election process will not end with a vote count. Thus, the country is likely to face legal proceedings, which threatens it with a constitutional crisis.
General conclusions and recommendations:
Since the euro/dollar pair has presumably completed the construction of the global wave 3 or C and the second corrective wave as part of the trend section starting on September 1, it is still recommend to sell the pair with targets located near the estimated level of 1.1520, corresponding 38.2% Fibonacci.