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The 4-hour chart for the euro/dollar pair still shows the same wave pattern, which is excellent because it allows us to predict how the situation will develop. Although its amplitude would be more appropriate for the impulsive section, the upward part of the trend has been corrected. The wave pattern a-b-c-d-e that we were able to obtain features a wave e that is far more complex than the other waves. If the wave analysis is accurate, then this pattern's development is complete, and wave e was far longer than any other wave. I still anticipate a significant decrease in the pair because we are expected to develop at least three waves downward. A few days or weeks of inactivity are possible with the pair, though. The quotes' retreat from the low they attained on Monday points to the beginning of wave 2 or b. If this is the case, then any background news will result in a rise in quotes for a while. In any event, I anticipate a new, rather sharp decrease following the completion of this wave, as the pair must first create at least three waves downward before considering a potential new upward section.
On Thursday, the euro/dollar pair fell by 90 basis points. Near midnight, the pair started to drop. The demand for the euro continued to decline throughout the Asian, European, and American sessions. Based on such a movement, I can deduce that the pair has completed a corrective wave b and is now prepared to begin developing a downward wave c. The planned wave b was somewhat short and, to be honest, unconvincing. Nonetheless, three waves can be seen inside it, so it can be said to be finished. I notice that it can have a five-wave form, but today's movement indicates that the market is more inclined to sell the EU currency, which is wonderful news in light of the present wave pattern, which suggests only a further decline.
Let's return to the inflation report. The primary indicator dropped from 8.6% to 8.5% in February, which is unquestionably a very minor decline. Since Germany's inflation increased in January and February, I already issued a warning that the indicator might be unreliable. In a few other EU countries, as well. In either case, the ECB cannot stop taking strong measures to tighten monetary policy in response to a 0.1% slowdown. The regulator now pays greater attention to the core inflation rate, which increased from 5.3% to 5.6% and hasn't slowed down a single time since it started to rise more than a year ago. It is safe to conclude that both inflation values are disappointing. But, in this instance, demand for the euro should have increased because such data indicate that the ECB will need to raise interest rates more aggressively and for a longer period than it may have anticipated. The ECB, which began tightening later than the Fed and the Bank of England and is doing it objectively slower, appears to be disappointing the market, according to recent indications.
I draw the conclusion that the upward trend section's development is finished based on the analysis. As a result, it is now allowed to take into account sales with targets close to the predicted mark of 1.0284, or 50.0% Fibonacci. A correction wave 2 or b can be developed at this point, which should be considered. Opening sales now on the MACD "down" indications would be a good idea.
On the older wave scale, the ascending trend section's wave pattern has grown longer but is likely finished. The a-b-c-d-e pattern is most likely represented by the five upward waves we observed. The downward part of the trend is already taking shape and can have any form or extent.
Díky analytickým přehledům společnosti InstaForex získáte plné povědomi o tržních trendech! Jako zákazníkovi společnosti InstaForex je Vám k dispozici velký počet bezplatných služeb umožňujících efektivní obchodování.
