On the four-hour chart, the wave pattern of the EUR/USD pair is becoming more complicated and may require adjustments and additions in the near future. The assumed wave 4 of the upward trend has already taken a five-wave form and no longer fits into the current wave pattern. Thus, the entire section of the trend, which started on March 31, will most likely still take a three-wave form. If this assumption is correct, then the decline in quotes, which began on May 25, is already taking place within the framework of a new downward trend, which is also likely to take a three-wave form. If so, the first wave (1 or a) of a new downward trend is being built at this time, and its targets are located between the 19th and 20th figures. It should also be noted that it does not even matter which wave is currently being formed since its internal wave pattern is not impulsive. Therefore, this wave can already be completed under certain conditions. It can be said that the current wave pattern is unclear.

The news background on Tuesday was very weak. The only report that the markets could not miss was during the day. This report was the US retail sales data, which was weaker than the expectations of the markets – trade volume in monthly terms declined by 1.3%, against the expected of just 0.6%. This proves once again the fact that, although the US economy is recovering quite quickly after the crisis, its recovery is still not permanent. The recent labor market reports also showed that there is little stability in the recovery. All this suggests that the Fed is unlikely to cut the quantitative stimulus program during its meeting. In the same way, there will hardly be any hints of its reduction in 2021.

In general, everyone is most interested in the inflation issue, which has already accelerated to 5% by the end of May. However, this indicator may begin to slow down in the coming months, as FOMC representatives said more than once. Thus, the meeting will most likely be passing through. Despite the fact that the US currency has been increasing for more than a month, the demand for it is still quite modest. Given the current wave pattern, it is still difficult for the US dollar to rely on the construction of an impulse section of the trend, only a corrective one. Anyhow, the report on industrial production was pleasing. It rose by 0.8% in May, although the markets were waiting for a slightly smaller increase.

Based on the analysis, the quotes of the instrument are still expected to rise, but we should wait until the current wave completes its formation, since it is still very difficult to understand which wave pattern it belongs to. The current wave pattern is such that the formation of the upward trend section may continue, or a new three-wave downward trend section may begin to form.

The wave pattern of the section of the new upward trend is not quite unambiguous. Initially, the area looked impulsive, and this was logical after building a three-wave correction pattern. However, it may turn out that the latest decline in quotes may be the beginning of a new corrective pattern – a downward one or the entire upward section of the trend will take a five-wave correction form.