EUR/USD. Analysis for April 11th. Euro continues to build complex wave structures
April 11, 2023 3:22 pm
The wave markup of the 4-hour chart for the euro/dollar pair continues to get complicated due to the recent ascending waves. These waves could be the beginning of a new upward trend segment (since the last downward one can be considered three-wave and completed), but at the same time, this trend segment may end soon if it also takes on a three-wave form. Thus, the wave pattern for the euro currency could become very complex, and it isn’t easy to work with it. At the current positions, the formation of an upward wave set may be completed as the third wave’s peak goes beyond the first one’s peak. The same thing we saw in the last downward formation. At the same time, there are other options for wave markup. It is advisable to rely on the scenario with an increase in the pair because the assumed wave c (of the descending wave set) was very weak. Therefore, buyers are stronger than sellers, and the ascending wave c may extend more. The nearest target is the peak of wave e, which corresponds to 1.1033. Wave c may be slightly longer than it is now and end just around the 1.1033 mark.
The holidays continue.
On Tuesday, the euro/dollar pair rose by 50 basis points, but the day before, it still fell by 50. In yesterday’s analysis, I pointed to the weak amplitude of movements, but in the second half of the day, the market began to trade more actively, which led to the strengthening of the US currency. At first glance, there was no reason for the market to buy dollars, as there was no news background yesterday. But the market could have been late to play Friday’s reports on unemployment and the labor market in the United States, which were similar to market expectations and pessimistic forecasts of various analysts, which have been abundant on the Internet lately. However, why the demand for the US currency fell today is already quite difficult to say.
In the morning, the European Union released the only report of the day on retail trade, which turned out to be better than market expectations, but at the same time, amounted to -3% y/y and -0.8% y/y. Retail trade volumes shrank in February, so it is difficult to call this report positive for the euro. But the demand for the European currency grew again. So far, such behavior of the pair can be attributed to the current wave markup, which still assumes some extension of wave c. But the news background for the European currency is not better now than for the American one. I do not expect a significant complication of the upward wave set. It will likely soon complete its formation, and we will see a new downward structure for at least three waves.
General conclusions.
Based on the analysis, the formation of an upward trend segment continues, which can take only a three-wave form and end soon. Therefore, now both sales and purchases can be equally advised. The news background does not answer which direction the pair is more likely to move. Wave analysis needs to provide a clear answer too. In the current situation, I recommend cautious purchases with targets around the 1.1033 mark, but sales with a Stop Loss above 1.1033 can also be considered now.
On the older wave scale, the wave markup of the ascending trend segment has taken an extended form but is probably completed. We saw five waves upward, 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 length.
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 complicated due to the recent ascending waves. These waves could be the beginning of a new upward trend segment (since the last downward one can be considered three-wave and completed), but at the same time, this trend segment may end soon if it also takes on a three-wave form. Thus, the wave pattern for the euro currency could become very complex, and it isn’t easy to work with it. At the current positions, the formation of an upward wave set may be completed as the third wave’s peak goes beyond the first one’s peak. The same thing we saw in the last downward formation. At the same time, there are other options for wave markup. It is advisable to rely on the scenario with an increase in the pair because the assumed wave c (of the descending wave set) was very weak. Therefore, buyers are stronger than sellers, and the ascending wave c may extend more. The nearest target is the peak of wave e, which corresponds to 1.1033. Wave c may be slightly longer than it is now and end just around the 1.1033 mark.
The holidays continue.
On Tuesday, the euro/dollar pair rose by 50 basis points, but the day before, it still fell by 50. In yesterday’s analysis, I pointed to the weak amplitude of movements, but in the second half of the day, the market began to trade more actively, which led to the strengthening of the US currency. At first glance, there was no reason for the market to buy dollars, as there was no news background yesterday. But the market could have been late to play Friday’s reports on unemployment and the labor market in the United States, which were similar to market expectations and pessimistic forecasts of various analysts, which have been abundant on the Internet lately. However, why the demand for the US currency fell today is already quite difficult to say.
In the morning, the European Union released the only report of the day on retail trade, which turned out to be better than market expectations, but at the same time, amounted to -3% y/y and -0.8% y/y. Retail trade volumes shrank in February, so it is difficult to call this report positive for the euro. But the demand for the European currency grew again. So far, such behavior of the pair can be attributed to the current wave markup, which still assumes some extension of wave c. But the news background for the European currency is not better now than for the American one. I do not expect a significant complication of the upward wave set. It will likely soon complete its formation, and we will see a new downward structure for at least three waves.
General conclusions.
Based on the analysis, the formation of an upward trend segment continues, which can take only a three-wave form and end soon. Therefore, now both sales and purchases can be equally advised. The news background does not answer which direction the pair is more likely to move. Wave analysis needs to provide a clear answer too. In the current situation, I recommend cautious purchases with targets around the 1.1033 mark, but sales with a Stop Loss above 1.1033 can also be considered now.
On the older wave scale, the wave markup of the ascending trend segment has taken an extended form but is probably completed. We saw five waves upward, 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 length.
The material has been provided by InstaForex Company – www.instaforex.com
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