Thursday was the first day of the week when the markets began to receive some economic information. Reports on inflation and unemployment claims in the US were released, as well as the European Central Bank Economic Bulletin. Take note that the US reports managed to move both instruments from a standstill, but still did not lead to significant price changes. And in my opinion, the conclusions we can draw from them cannot support either buyers or sellers. The market simply expected to see certain values, but saw slightly different ones, hence the reaction.
The ECB Economic Bulletin probably never had a chance to influence market sentiment from the very beginning. Almost none of the leading analysts even mentioned it, as it is merely an assessment of the prospects of monetary policy and the economy of the European Union. Roughly speaking, it’s expectations, not reality. The Bulletin stated that inflation is decreasing but will probably remain above the target level for a long time. The economic prospects of the European Union may deteriorate in the near future due to high inflation, high ECB rates, and a decline in domestic demand. The unemployment rate remains at a historical low of 6.5% and is unlikely to increase significantly by the end of the year. GDP and inflation prospects remain highly uncertain.
Elevated risks for inflation were also noted, associated with the possible rise in energy and food prices. The former have already started to rise, and the latter might do so due to the suspension of the “grain deal.” Economic and business activity in the eurozone continues to deteriorate in response to the rise in financing costs and high rates.
Based on the conducted analysis, I came to the conclusion that the upward wave pattern is complete. I still consider targets around 1.0500-1.0600 quite realistic, and with these targets in mind, I recommend selling the instrument. The a-b-c structure looks complete and convincing, therefore, it’s done. Hence, I recommend selling the instrument with targets around the level of 1.0836 and below. I believe that the downtrend section will continue to be built. If the next attempt to break the 1.1032 level is successful, then this scenario should be temporarily put on hold.
The wave pattern of the GBP/USD instrument suggests a decline. You could have opened short positions, which I recommended a few weeks ago. The target was the 1.2618 level, and the pair reached it. There is a possibility of completing the current descending wave if it represents wave d. In this case, the construction of wave 5 has already started from the current levels. In my opinion, this is not the most likely scenario, and a successful attempt to break 1.2616 (or an unsuccessful attempt at 1.2840) will indicate that the market is prepared to build the downward wave. This is the scenario I am counting on.
The material has been provided by InstaForex Company – www.instaforex.com
Thursday was the first day of the week when the markets began to receive some economic information. Reports on inflation and unemployment claims in the US were released, as well as the European Central Bank Economic Bulletin. Take note that the US reports managed to move both instruments from a standstill, but still did not lead to significant price changes. And in my opinion, the conclusions we can draw from them cannot support either buyers or sellers. The market simply expected to see certain values, but saw slightly different ones, hence the reaction.
The ECB Economic Bulletin probably never had a chance to influence market sentiment from the very beginning. Almost none of the leading analysts even mentioned it, as it is merely an assessment of the prospects of monetary policy and the economy of the European Union. Roughly speaking, it’s expectations, not reality. The Bulletin stated that inflation is decreasing but will probably remain above the target level for a long time. The economic prospects of the European Union may deteriorate in the near future due to high inflation, high ECB rates, and a decline in domestic demand. The unemployment rate remains at a historical low of 6.5% and is unlikely to increase significantly by the end of the year. GDP and inflation prospects remain highly uncertain.
Elevated risks for inflation were also noted, associated with the possible rise in energy and food prices. The former have already started to rise, and the latter might do so due to the suspension of the “grain deal.” Economic and business activity in the eurozone continues to deteriorate in response to the rise in financing costs and high rates.
Based on the conducted analysis, I came to the conclusion that the upward wave pattern is complete. I still consider targets around 1.0500-1.0600 quite realistic, and with these targets in mind, I recommend selling the instrument. The a-b-c structure looks complete and convincing, therefore, it’s done. Hence, I recommend selling the instrument with targets around the level of 1.0836 and below. I believe that the downtrend section will continue to be built. If the next attempt to break the 1.1032 level is successful, then this scenario should be temporarily put on hold.
The wave pattern of the GBP/USD instrument suggests a decline. You could have opened short positions, which I recommended a few weeks ago. The target was the 1.2618 level, and the pair reached it. There is a possibility of completing the current descending wave if it represents wave d. In this case, the construction of wave 5 has already started from the current levels. In my opinion, this is not the most likely scenario, and a successful attempt to break 1.2616 (or an unsuccessful attempt at 1.2840) will indicate that the market is prepared to build the downward wave. This is the scenario I am counting on.
The material has been provided by InstaForex Company – www.instaforex.com
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