EUR/USD. Analysis for July 4th. The market has moved to a horizontal movement due to the holiday in the US
July 4, 2023 5:22 pm
The wave analysis of the 4-hour chart for the EUR/USD pair continues to be not quite standard but still needs to be clarified. The entire ascending segment of the trend, which began on March 15th, can take a more complex structure, but at this time, I am counting on forming a declining segment of the trend, which will likely also be three-wave. Lately, I have regularly said that I am waiting for the pair near the 5-figure mark, where the formation of the ascending three-wave started at one time. So far, I am not recanting my words. The presumed wave b could have completed its formation last week, as indicated by the subsequent retreat of quotes from the peaks reached.
However, in light of recent events and especially the movements of the GBP/USD pair, I have developed an alternative wave analysis, which assumes that the entire segment of the trend between March 15th and April 26th is one wave a. If this is indeed the case, the next wave is b, and now we are observing the formation of an ascending wave c. In this case, the wave analysis of the British and European currencies coincide, and everything falls into place. If this assumption is correct, the euro will resume rising to the 11-figure mark and above from current positions.
Independence Day in the US reflected on the market activity
The EUR/USD rate on Tuesday did not change. The amplitude of movements during the day was 13 base points. There were no movements of the pair today, as 25 points is not a movement but simple market noise. Independence Day is celebrated in the US today, and all American banks, exchanges, and financial structures are closed. Unquestionably, trading volumes have dropped to zero, and we have seen a “day without movements.” Recall that yesterday the pair was traded more actively but closed where it had opened by the end of the day. Therefore, the first two days of a very interesting and important week were the most boring in recent months.
Let me remind you that yesterday in the US and the European Union, business activity indices in manufacturing were released. Despite all the indices being worse than the market expectations, there was no strong reaction. The market also made no conclusions, as the business activity indices (with all due respect to them) are not the most important reports. And now, when the Fed and the ECB are still fighting excessively high inflation, other more important topics are at the forefront. For example, economic slowdown and peak interest rates in America and the European Union. The current news background does not support the dollar or the euro to a greater extent.
General conclusions.
Based on the analysis conducted, the formation of the declining trend segment continues. The pair again has quite a large space for a decline. I still consider the targets in the area of 1.0500-1.0600 quite realistic, and with these goals, I advise selling the pair according to the MACD indicator signals “downward.” The presumed wave b is completed. According to the alternative analysis, the ascending wave will be longer and more complex; this scenario will become the main one in case of a successful attempt to break through the current peak of wave b. The news background does not currently support the euro to a greater extent.
On the older wave scale, the wave analysis of the ascending trend segment took an extended form but is likely completed. We have seen five waves up, most likely the a-b-c-d-e structure. Then, the pair built two three-wave segments, down and up. It is likely in the process of constructing another downward three-wave structure.
The material has been provided by InstaForex Company – www.instaforex.com
The wave analysis of the 4-hour chart for the EUR/USD pair continues to be not quite standard but still needs to be clarified. The entire ascending segment of the trend, which began on March 15th, can take a more complex structure, but at this time, I am counting on forming a declining segment of the trend, which will likely also be three-wave. Lately, I have regularly said that I am waiting for the pair near the 5-figure mark, where the formation of the ascending three-wave started at one time. So far, I am not recanting my words. The presumed wave b could have completed its formation last week, as indicated by the subsequent retreat of quotes from the peaks reached.
However, in light of recent events and especially the movements of the GBP/USD pair, I have developed an alternative wave analysis, which assumes that the entire segment of the trend between March 15th and April 26th is one wave a. If this is indeed the case, the next wave is b, and now we are observing the formation of an ascending wave c. In this case, the wave analysis of the British and European currencies coincide, and everything falls into place. If this assumption is correct, the euro will resume rising to the 11-figure mark and above from current positions.
Independence Day in the US reflected on the market activity
The EUR/USD rate on Tuesday did not change. The amplitude of movements during the day was 13 base points. There were no movements of the pair today, as 25 points is not a movement but simple market noise. Independence Day is celebrated in the US today, and all American banks, exchanges, and financial structures are closed. Unquestionably, trading volumes have dropped to zero, and we have seen a “day without movements.” Recall that yesterday the pair was traded more actively but closed where it had opened by the end of the day. Therefore, the first two days of a very interesting and important week were the most boring in recent months.
Let me remind you that yesterday in the US and the European Union, business activity indices in manufacturing were released. Despite all the indices being worse than the market expectations, there was no strong reaction. The market also made no conclusions, as the business activity indices (with all due respect to them) are not the most important reports. And now, when the Fed and the ECB are still fighting excessively high inflation, other more important topics are at the forefront. For example, economic slowdown and peak interest rates in America and the European Union. The current news background does not support the dollar or the euro to a greater extent.
General conclusions.
Based on the analysis conducted, the formation of the declining trend segment continues. The pair again has quite a large space for a decline. I still consider the targets in the area of 1.0500-1.0600 quite realistic, and with these goals, I advise selling the pair according to the MACD indicator signals “downward.” The presumed wave b is completed. According to the alternative analysis, the ascending wave will be longer and more complex; this scenario will become the main one in case of a successful attempt to break through the current peak of wave b. The news background does not currently support the euro to a greater extent.
On the older wave scale, the wave analysis of the ascending trend segment took an extended form but is likely completed. We have seen five waves up, most likely the a-b-c-d-e structure. Then, the pair built two three-wave segments, down and up. It is likely in the process of constructing another downward three-wave structure.
The material has been provided by InstaForex Company – www.instaforex.com
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