The wave layout of EUR/USD on a 4-hour chart has been the same for a few recent days and remains dubious and complicated. This is especially true for the inner structure of the last downward wave. The picture is more or less clear for senior timeframes. Currently, wave C is supposedly still in progress. At least, a minor retracement off the lows suggests this conclusion. The currency pair is following the overall downtrend. At the moment, trading the pair seems rather difficult because most of inner waves do not exceed 100-120 pips or even less. Upward and downward waves are constantly alternating each other. Under the current wave structure, any wave can get more complicated anytime. So, the ongoing wave structure does not provide any clues as to how long EUR/USD will continue its decline. Apart from that, the last waves were literally horizontal, thus making trading conditions even worse.

On Tuesday, the news background was rather empty for EUR/USD. In the second half of the day, demand for the euro rose a bit. Nevertheless, the currency pair is still trapped inside a narrow trading range. Market participants are sitting on the sidelines of the Federal Reserve's policy meeting, anticipating some hints on further policy moves. Importantly, the economic background in the US looks a bit different than the Fed's policymakers would like to see. First, consumer inflation in the US has accelerated faster than previously expected. But the US central bank downplays the gravity of the situation, being unable to tame runaway inflation because this would drag down the pace of the US economic recovery. Therefore, the regulator is not going to curb high inflation, though there are chances of its further acceleration. Second, the US is reporting growing rates of those who are infected by the Delta coronavirus strain. This resurgence could cast a shadow on business and economic activity.

Perhaps the US authorities will not venture into another lockdown, but the population could again shift to a sleeping mode. In other words, Americans will bring down their social activity, travel less and spend less money, thus amassing their savings. This is an unwanted scenario for the economy, especially provided that the new pandemic wave escalates. All in all, the US economy is running risks of a slowdown. I believe that Jerome Powell will come up with quiet and dovish rhetoric. If my prediction comes true, the euro will be able to complete building downward wave C and will begin building a new upward section. I opt for this scenario as the most plausible for the time being. However, it doesn't make sense to guess something. It would be better to buy the instrument in small portions.

The wave layout of the new downward section looks confusing that obscures any trading decisions. However, at the moment this section seems to be already complete or it is close to its completion because it has turned into a three-wave structure. Thus, currently I expect that a new upward section is about to begin soon that will consist of at least three waves.