15.01.201815:42 Forex Analysis & Reviews: Global macro overview for 15/01/2018

At the end of 2017, the market participants were placing the bets on ECB's greater hawkishness during all 2018, and the market seems to have less long positions in EUR than it would like to. The easiest way to get rid of them is through the Dollar and even positive surprises in US data have not prevented it. Strong Retail Sales data showed a hard trend at the end of the fourth quarter, and a higher-than-expected core inflation reading at 0.3% m/m opens the way to greater Fed firmness in the field of standardization. However, when the March interest rate increase is estimated at 88 .0% already, it is difficult to defend the Dollar by explaining that he got something "more" from the data. Meanwhile, in the case of other major currencies, either the facilities are more robust or too complex to bear the risk. Positive sentiment on the stock markets supports risky currencies like AUD, CAD, NZD, NOK. The British Pound has breakthroughs on information about Brexit - on Friday the Pound gained news that Spain and the Netherlands want the so-called "Soft Brexit" (later the information was denied). JPY made the rally last week on the wave of speculation about a possible return in the policy of the Bank of Japan. What's left is way less liquid SEK and CHF. In conclusion, USD sales are the most convenient form of buying EUR at this moment.

Let's now take a look at the EUR/USD technical picture at the H4 time frame from the Elliott Wave perspective. The market has hit the level of 1.2296 which is the 100% Fibo Extension and it looks like it will be a top for the wave (iii). This means it is a correction time and the corrective decline might reach even the level of 1.2200 before the next wave up will be made.