The wave marking of the 4-hour chart for the euro/dollar instrument continues to look convincing and does not require adjustments. The instrument continues to build a descending wave 5-E, which is the last in the structure of the descending trend section. If this is true, then the decline in the quotes of the euro currency may continue for several more days, since this wave should turn out to be a five-wave in its internal structure. At the moment, four completed internal waves are visible inside this wave, so I'm counting on building another pulse wave. In the near future, the instrument may decline to the level of 1.0355, near which the construction of the current downward wave and the entire downward trend section may be completed. If the breakout attempt of 1.0355 turns out to be successful, the instrument will further complicate its wave structure and continue to decline. So far, the wave markup looks like in a textbook.
Christine Lagarde strikes the euro currency again.
The euro/dollar instrument declined by 100 basis points on Thursday. All thanks to ECB President Christine Lagarde. Yesterday, she announced that the regulator could start raising interest rates within the next few weeks after the completion of the APP incentive program. She had said the same words before, but each time it was like the first time. The market continues to sell euros as soon as it gets any reason to do so. Wave markup not only allows these actions but even supports them, so everything is fine. However, I cannot help but note that this rhetoric of Lagarde is not "terrifying" or "encouraging." Christine Lagarde gives a signal only that a rate hike in July, for the first time in 10 years, is not excluded. Unlike Luis de Guindos, she does not say that the rate may be raised in July. At the moment, rates are at record lows, and the ECB itself continues to stimulate the economy with the APP program, despite a high and continuing to rise in inflation. Therefore, by and large, Lagarde talks about a possible tightening of monetary policy, but the market hears only negative. In the current situation, I think we should pay more attention to the wave markup, as it looks very convincing now. If it is correct, then the decline of the instrument will be completed in the coming days.
In addition, Christine Lagarde said that the ECB will complete asset purchases at the beginning of the third quarter of this year, but at the same time noted high risks for the European economy due to the Ukrainian-Russian conflict. Inflation in the EU continues to rise, but the risks to the economy are also growing. That is, the ECB may face the same situation that has already come to the United States, where GDP declined in the first quarter, and rates are actively rising despite this. Central banks are now on the verge of a serious choice, what to sacrifice: economic growth or inflation? From my point of view, both banks will try to balance between two evils, trying not to put their economy into recession and at the same time reduce inflation as much as possible. But what will come of it? And how will this affect the euro/dollar instrument?
General conclusions.
Based on the analysis, I still conclude that the construction of wave 5-E. If so, now is still a good time to sell the European currency with targets located around the 1.0355 mark, which corresponds to 261.8% Fibonacci, for each MACD signal "down". The construction of the proposed wave 4-5-E has already been completed.
On a larger scale, it can be seen that the construction of the proposed wave D has been completed, and the instrument regularly updates its low. Thus, the fifth wave of a non-pulse downward trend section is being built, which turns out to be as long as wave C. The European currency may still decline for some time.
