empty
 
 
You are about to leave
www.instaforex.eu >
a website operated by
INSTANT TRADING EU LTD
Open Account

15.01.202212:02 Forex Analysis & Reviews: EUR/USD analysis on January 14. A sharp decline in the European currency. Is the rising wave complete?

This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here.

Exchange Rates 15.01.2022 analysis

The wave marking of the 4-hour chart for the euro/dollar instrument still does not change. Over the past few days this week, the quotes of the instrument have been rising and have broken through the previous peak of the expected wave d. Thus, wave d turned out to be more extended than I originally expected. However, this change does not change the essence of the wave markup. I still believe that the current wave is corrective, not impulsive, as evidenced by its complex internal wave structure. Therefore, it cannot be wave 1 of a new upward trend segment. If so, the decline in quotes will resume within the framework of the expected wave e-C and Friday's departure of quotes from the reached highs may indirectly indicate the construction of a new downward wave. At the same time, a further increase in the quotes of the European currency may lead to the need to make adjustments to the current wave markup, since wave d will turn out in this case to be the longest wave in the composition of the downward trend section. An unsuccessful attempt to break through the 1.1455 mark also indicates that the market is not ready for further purchases of the instrument.

American inflation continues to accelerate.

The euro/dollar instrument fell by 50 basis points on Friday. Demand for the European currency began to decline, which corresponds to the current wave marking but does not correspond to Friday's news background. Christine Lagarde said on Friday that the ECB is ready to adjust monetary policy to reach the inflation target of about 2%. "We understand that the rise in prices worries the residents of the European Union. Our commitment to the goal of price stability remains unwavering, and we will take all necessary measures to stabilize price growth," the ECB president said. This speech was quite neutral since Lagarde did not say anything about raising the interest rate or ending the stimulus program. According to earlier information, it follows that the emergency asset purchase program will be completed in March 2022, but there is no new information about this. It is completely unknown what impact the winter wave of the pandemic will leave on the economy. Let me remind you that in the European Union, up to 50% of the population may become infected in the coming months. That's what the WHO thinks. With such a huge number of patients, it is unlikely that the economy will not suffer in any way. And if it suffers, the plans of the ECB may change. Also on Friday, a report on retail trade with America in December was released. The figures turned out to be sad. Instead of zero sales growth, the markets saw a decrease in volumes by 1.9% m/m. The report on industrial production was no better, it decreased by 0.1% m/m with market expectations of +0.2% m/m. The consumer sentiment index from the University of Michigan also turned out to be weak: only 68.8 with expectations of 70.0. Thus, all the most important reports in America turned out to be weak, but demand for the US currency still rose on Friday. From my point of view, this is evidence that the market is ready to build a downward wave, despite the weak news from the United States.

General conclusions.

Based on the analysis, I conclude that the construction of the ascending wave d can be completed. If this assumption is correct, then now it is possible to sell the instrument based on the construction of the wave e-C with targets located near the calculated marks of 1.1315 and 1.1154, which equates to 100.0% and 127.2% by Fibonacci. A successful attempt to break through the 1.1455 mark will indicate an even greater complication of the upward wave and cancel the sales option.

Exchange Rates 15.01.2022 analysis

Chin Zhao
Analytical expert of InstaForex
© 2007-2024

Open trading account

InstaForex analytical reviews will make you fully aware of market trends! Being an InstaForex client, you are provided with a large number of free services for efficient trading.




You are now leaving www.instaforex.eu, a website operated by INSTANT TRADING EU LTD
Can't speak right now?
Ask your question in the chat.

Turn "Do Not Track" off