Analysis of EUR/USD on April 17th. Monday continues the trend of Friday.
April 17, 2023 3:22 pm
The wave markup of the 4-hour chart for the euro/dollar pair continues to get more complex due to the latest ascending waves. These waves could be an independent upward segment of the trend (since the last downward move can be considered a three-wave and completed), and it may already be completed if it also takes on a three-wave form. Thus, the wave pattern for the euro currency could be very complex, and it isn’t easy to work with it. At the current positions, the formation of an upward wave set may end as the peak of the third wave has surpassed the peak of the first. We saw the same thing in the last descending formation. At the same time, there are other wave markup options. For example, a full-fledged five-wave (but also corrective) structure. It is now advisable to rely on the scenario of lowering the pair because the ascending three-wave sequence looks complete and finished. Therefore, at this time, the formation of a new downward three-wave sequence may begin, and the downward attempt to break through the 1.1030 mark indicates the market’s readiness for sales.
Has the decline started?
The euro/dollar pair fell by 55 basis points on Friday and another 50 today. During the day, the news background could have been more abundant. To be more precise, it was simply absent. The pair’s decline began a few hours ago, so it can only be linked to the American session. Recall that on Friday, we saw a similar picture – the market was resting in the first half of the day and selling in the second. Thus, American market participants are more interested in the dollar, while Europeans prefer to observe the situation. A few days ago, I thought that the formation of an upward trend segment could be delayed, as demand for the European currency was growing too rapidly, but now it seems that the formation of a downward wave set will begin. In favor of this is the fact that there is not much news support for the euro currency.
Most of the recent economic reports from the US have been at a decent level. This speaks to the good state of the American economy, despite concerns from some analysts and officials about a recession in the second half of the year. However, suppose the European currency used to rise due to the ECB’s monetary policy (which was tighter than the Fed’s). In that case, this factor is already taken into account, and secondly, no strong interest rate hikes are expected from the European regulator. The same is not expected from the Fed, but in recent weeks, the euro currency has been growing, so in the coming weeks, the dollar should grow. I still advise relying on the 0.0% Fibonacci level. Above it, one can expect a continuation of the pair’s increase; below it – count on at least a three-wave downward section.
General conclusions.
Based on the conducted analysis, the upward trend segment is constructed. Therefore, it is advisable to sell now, as the pair has ample room for a decline. The target of 1.0600 can be considered quite realistic. With this goal in mind, I advise selling the pair on MACD indicator reversals “down” until the quotes successfully attempt to break through the 1.1030 mark, which may not happen.
On the older wave scale, the wave markup of the ascending trend segment has taken an extended form but is likely complete. We saw five waves up, which are most likely the a-b-c-d-e structure. The formation of the downward trend segment may still need to be completed, and it can take any form in terms of structure and extent.
The material has been provided by InstaForex Company – www.instaforex.com
The wave markup of the 4-hour chart for the euro/dollar pair continues to get more complex due to the latest ascending waves. These waves could be an independent upward segment of the trend (since the last downward move can be considered a three-wave and completed), and it may already be completed if it also takes on a three-wave form. Thus, the wave pattern for the euro currency could be very complex, and it isn’t easy to work with it. At the current positions, the formation of an upward wave set may end as the peak of the third wave has surpassed the peak of the first. We saw the same thing in the last descending formation. At the same time, there are other wave markup options. For example, a full-fledged five-wave (but also corrective) structure. It is now advisable to rely on the scenario of lowering the pair because the ascending three-wave sequence looks complete and finished. Therefore, at this time, the formation of a new downward three-wave sequence may begin, and the downward attempt to break through the 1.1030 mark indicates the market’s readiness for sales.
Has the decline started?
The euro/dollar pair fell by 55 basis points on Friday and another 50 today. During the day, the news background could have been more abundant. To be more precise, it was simply absent. The pair’s decline began a few hours ago, so it can only be linked to the American session. Recall that on Friday, we saw a similar picture – the market was resting in the first half of the day and selling in the second. Thus, American market participants are more interested in the dollar, while Europeans prefer to observe the situation. A few days ago, I thought that the formation of an upward trend segment could be delayed, as demand for the European currency was growing too rapidly, but now it seems that the formation of a downward wave set will begin. In favor of this is the fact that there is not much news support for the euro currency.
Most of the recent economic reports from the US have been at a decent level. This speaks to the good state of the American economy, despite concerns from some analysts and officials about a recession in the second half of the year. However, suppose the European currency used to rise due to the ECB’s monetary policy (which was tighter than the Fed’s). In that case, this factor is already taken into account, and secondly, no strong interest rate hikes are expected from the European regulator. The same is not expected from the Fed, but in recent weeks, the euro currency has been growing, so in the coming weeks, the dollar should grow. I still advise relying on the 0.0% Fibonacci level. Above it, one can expect a continuation of the pair’s increase; below it – count on at least a three-wave downward section.
General conclusions.
Based on the conducted analysis, the upward trend segment is constructed. Therefore, it is advisable to sell now, as the pair has ample room for a decline. The target of 1.0600 can be considered quite realistic. With this goal in mind, I advise selling the pair on MACD indicator reversals “down” until the quotes successfully attempt to break through the 1.1030 mark, which may not happen.
On the older wave scale, the wave markup of the ascending trend segment has taken an extended form but is likely complete. We saw five waves up, which are most likely the a-b-c-d-e structure. The formation of the downward trend segment may still need to be completed, and it can take any form in terms of structure and extent.
The material has been provided by InstaForex Company – www.instaforex.com
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