Analysis of EUR/USD on April 26. The dollar is under market pressure again
April 26, 2023 4:23 pm
The wave analysis of the 4-hour chart for the euro/dollar pair continues to get tangled due to the recent ascending waves but has stayed the same in recent days and weeks. These waves can be an independent upward trend segment (as the last downward one can be considered a three-wave and completed), and they may also be nearing completion if they take a three-wave form. Thus, the wave picture for the euro currency can become very complex, and it isn’t easy to work with it now. At the current positions, the formation of the upward wave set may be complete as the peak of the third wave has gone beyond the peak of the first. The same thing was seen in the last downward formation (minimal low update and segment completion). At the same time, there are other options for wave analysis. For example, a full-fledged five-wave (but also corrective) structure. It is advisable to proceed from the scenario with a decrease in the pair because the ascending three-wave set looks complete and finished. Therefore, in the near future, the formation of a new downward three-wave set may begin, but a new successful attempt to break through the 1.1030 mark indicates the market’s readiness for new purchases. For now, let’s not rush with sales.
Demand for the dollar is falling again, although it should be the other way around.
The euro/dollar pair fell by 70 basis points on Tuesday and rose by 110 today. Almost every day, we see a movement opposite the previous day’s movement. The market continues to panic, although there are a few reasons for panic now. There are even fewer reasons for the market to trade so actively now. The news background was virtually absent on Monday, Tuesday, and half of Wednesday. Of course, there were several speeches by ECB members, but if you analyze them closely, it is obvious that they could not cause the pair movements that everyone eventually saw. The rhetoric of ECB members is now roughly the same – “moderately hawkish.” However, the market sometimes increases demand for the euro currency and sometimes decreases it. Based on this, the news background has nothing to do with it. We see such ordinary speeches every week, about ten times. They are important, as they only show that the regulator’s mood has not changed. But they cannot affect the market sentiment every day.
Today in the US, the first interesting report of the week was released. The volume of orders for durable goods increased by 3.2% m/m, although the market expected no more than +0.8% m/m. And what happened next? Demand for the US currency decreased even more. This fact only reinforces my belief that the news background currently has no significance for the market. The pair continues to jump in different directions. Today we saw a strong increase, and tomorrow, with the same success and for the same reasons, it may already be moving downward. The main thing is that the upward trend segment is readable.
General conclusions.
Based on the analysis, the formation of the upward trend segment is nearing completion. Therefore, now we can advise sales, and the pair has quite a large space for a decrease. The 1.0600 target can be considered quite realistic. With this goal, I advise selling the pair at the MACD indicator reversals “downward,” but now we should wait for a successful attempt to break through the 1.1030 mark from above.
On the older wave scale, the wave analysis of the ascending trend segment has taken on an extended form but is likely completed. We saw five waves up, which most likely form an 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 length.
The material has been provided by InstaForex Company – www.instaforex.com
The wave analysis of the 4-hour chart for the euro/dollar pair continues to get tangled due to the recent ascending waves but has stayed the same in recent days and weeks. These waves can be an independent upward trend segment (as the last downward one can be considered a three-wave and completed), and they may also be nearing completion if they take a three-wave form. Thus, the wave picture for the euro currency can become very complex, and it isn’t easy to work with it now. At the current positions, the formation of the upward wave set may be complete as the peak of the third wave has gone beyond the peak of the first. The same thing was seen in the last downward formation (minimal low update and segment completion). At the same time, there are other options for wave analysis. For example, a full-fledged five-wave (but also corrective) structure. It is advisable to proceed from the scenario with a decrease in the pair because the ascending three-wave set looks complete and finished. Therefore, in the near future, the formation of a new downward three-wave set may begin, but a new successful attempt to break through the 1.1030 mark indicates the market’s readiness for new purchases. For now, let’s not rush with sales.
Demand for the dollar is falling again, although it should be the other way around.
The euro/dollar pair fell by 70 basis points on Tuesday and rose by 110 today. Almost every day, we see a movement opposite the previous day’s movement. The market continues to panic, although there are a few reasons for panic now. There are even fewer reasons for the market to trade so actively now. The news background was virtually absent on Monday, Tuesday, and half of Wednesday. Of course, there were several speeches by ECB members, but if you analyze them closely, it is obvious that they could not cause the pair movements that everyone eventually saw. The rhetoric of ECB members is now roughly the same – “moderately hawkish.” However, the market sometimes increases demand for the euro currency and sometimes decreases it. Based on this, the news background has nothing to do with it. We see such ordinary speeches every week, about ten times. They are important, as they only show that the regulator’s mood has not changed. But they cannot affect the market sentiment every day.
Today in the US, the first interesting report of the week was released. The volume of orders for durable goods increased by 3.2% m/m, although the market expected no more than +0.8% m/m. And what happened next? Demand for the US currency decreased even more. This fact only reinforces my belief that the news background currently has no significance for the market. The pair continues to jump in different directions. Today we saw a strong increase, and tomorrow, with the same success and for the same reasons, it may already be moving downward. The main thing is that the upward trend segment is readable.
General conclusions.
Based on the analysis, the formation of the upward trend segment is nearing completion. Therefore, now we can advise sales, and the pair has quite a large space for a decrease. The 1.0600 target can be considered quite realistic. With this goal, I advise selling the pair at the MACD indicator reversals “downward,” but now we should wait for a successful attempt to break through the 1.1030 mark from above.
On the older wave scale, the wave analysis of the ascending trend segment has taken on an extended form but is likely completed. We saw five waves up, which most likely form an 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 length.
The material has been provided by InstaForex Company – www.instaforex.com
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