Analysis of EUR/USD on August 9th. The market has moved sideways
August 9, 2023 6:23 pm
The wave analysis of the 4-hour chart for the euro/dollar remains quite clear. The upward trend segment began construction last year and has taken on a complex structure. Over the past six months, we have only seen alternate three-wave structures. Recently, I have consistently said that I expect the pair to approach the 5th figure, from where the construction of the last bullish three-wave started. I stand by my words. The next ascending three-wave structure is complete, so the market has begun building a bearish trend segment.
Theoretically, the trend section, which began on May 31, can assume a five-wave appearance with an a-b-c-d-e structure, but it’s difficult to state this with certainty. The news background needs to be stronger for the euro currency (sometimes quite weak) for demand to remain consistently high. Additionally, economic data from the European Union needs to be better. The failed attempt to breach the 1.1032 mark, corresponding to a 38.2% Fibonacci retracement, may indicate the market’s readiness to sell again.
The movement stalled due to an empty calendar.
The euro/dollar rate increased by 30 basis points on Wednesday. However, my readers should be aware of this movement; it means little. The above illustration shows that our movement has been horizontal over several days. The upward corrective wave has yet to start, and the downward impulsive (presumed) still needs to finish. The market is in limbo and awaits a news background, which has been virtually absent this week.
What can I highlight from the news and reports? Remarks by Michel Bowman and the consumer price index in Germany? This needed more for the market to make a decisive move in a specific direction. The latter half of the week promises to be slightly more interesting, as tomorrow, the U.S. will release the inflation report for July. Everyone who could write or talk about this report has done so, making it insignificant. This week, it’s the only one.
Thus, this report will shake up the market and give it a new impulse. If that doesn’t happen, the sideways movement will continue. And it’s worth noting that this is possible. If inflation in July amounts to 3.3%, in line with the forecast, and core inflation remains unchanged from June (4.8%), the market won’t have a reason to react with new trades.
General conclusions:
Based on the analysis, I conclude that the construction of the bullish wave sequence is complete. I still consider targets in the range of 1.0500-1.0600 to be quite realistic, and with these targets, I advise selling the pair. The a-b-c structure appears complete and convincing, and closing below the 1.1172 mark indirectly confirms a developing downward trend segment. Therefore, I continue to advise selling the pair with targets near the 1.0836 mark and lower. The construction of the bearish trend segment will continue.
On a larger wave scale, the wave layout of the ascending trend segment has taken an extended form but is likely complete. We’ve observed five upward waves, probably forming an a-b-c-d-e structure. Subsequently, the pair constructed four three-wave sequences: two downward and two upward. It has entered the phase of building another descending three-wave structure.
The material has been provided by InstaForex Company – www.instaforex.com
The wave analysis of the 4-hour chart for the euro/dollar remains quite clear. The upward trend segment began construction last year and has taken on a complex structure. Over the past six months, we have only seen alternate three-wave structures. Recently, I have consistently said that I expect the pair to approach the 5th figure, from where the construction of the last bullish three-wave started. I stand by my words. The next ascending three-wave structure is complete, so the market has begun building a bearish trend segment.
Theoretically, the trend section, which began on May 31, can assume a five-wave appearance with an a-b-c-d-e structure, but it’s difficult to state this with certainty. The news background needs to be stronger for the euro currency (sometimes quite weak) for demand to remain consistently high. Additionally, economic data from the European Union needs to be better. The failed attempt to breach the 1.1032 mark, corresponding to a 38.2% Fibonacci retracement, may indicate the market’s readiness to sell again.
The movement stalled due to an empty calendar.
The euro/dollar rate increased by 30 basis points on Wednesday. However, my readers should be aware of this movement; it means little. The above illustration shows that our movement has been horizontal over several days. The upward corrective wave has yet to start, and the downward impulsive (presumed) still needs to finish. The market is in limbo and awaits a news background, which has been virtually absent this week.
What can I highlight from the news and reports? Remarks by Michel Bowman and the consumer price index in Germany? This needed more for the market to make a decisive move in a specific direction. The latter half of the week promises to be slightly more interesting, as tomorrow, the U.S. will release the inflation report for July. Everyone who could write or talk about this report has done so, making it insignificant. This week, it’s the only one.
Thus, this report will shake up the market and give it a new impulse. If that doesn’t happen, the sideways movement will continue. And it’s worth noting that this is possible. If inflation in July amounts to 3.3%, in line with the forecast, and core inflation remains unchanged from June (4.8%), the market won’t have a reason to react with new trades.
General conclusions:
Based on the analysis, I conclude that the construction of the bullish wave sequence is complete. I still consider targets in the range of 1.0500-1.0600 to be quite realistic, and with these targets, I advise selling the pair. The a-b-c structure appears complete and convincing, and closing below the 1.1172 mark indirectly confirms a developing downward trend segment. Therefore, I continue to advise selling the pair with targets near the 1.0836 mark and lower. The construction of the bearish trend segment will continue.
On a larger wave scale, the wave layout of the ascending trend segment has taken an extended form but is likely complete. We’ve observed five upward waves, probably forming an a-b-c-d-e structure. Subsequently, the pair constructed four three-wave sequences: two downward and two upward. It has entered the phase of building another descending three-wave structure.
The material has been provided by InstaForex Company – www.instaforex.com
Related Posts: