The wave marking of the 4-hour chart for the euro/dollar instrument continues to look convincing and does not require adjustments yet. The instrument has completed the construction of the descending wave 5-E, which is the last in the structure of the descending trend section. If this is true, then at this time the construction of a new upward section of the trend has begun. It can turn out to be three-wave, or it can be pulsed. At the moment, two waves of a new section of the trend are being overlooked. Wave a is completed, and wave b has taken a three-wave form and as part of its construction, the instrument has decreased to the low of the entire downward trend section. The decline in quotes turned out to be stronger than I expected. Wave b has taken a very deep look, but the wave marking is not broken yet – the instrument has not declined under the low of the downward trend section. This section of the trend can complicate its internal wave structure and take a much more extended form. Unfortunately, the very promising wave markup may be broken due to the news background, which at the end of last week led to a strong decline in demand for the euro currency. At the moment, the chances of building an upward wave c remain.
The Fed raised the rate by 0.75%.
The euro/dollar instrument did not rise or fall by a single point on Thursday. During the day, the euro currency, of course, did not stand in one place, but by the end of the day it turns out to be at the opening marks of that day. The situation was approximately the same as the day before when the Fed announced the results of its two-day meeting in the evening. According to the results of Wednesday, the euro currency added only 30 basis points in price. Thus, for many in the market, the outcome of the Fed meeting went much more smoothly than it could have been. Last night, the amplitude of the instrument increased for several hours, but I expected a stronger movement and not an increase in the European currency when the Fed raised the rate more than the market expected. However, even today it has become clear that there will be no new dollar purchases. During the day, the instrument declined to the low of the previous trend, but one unsuccessful attempt to break through the 261.8% Fibonacci level remained the only unsuccessful one. Therefore, I believe that the wave marking could save the euro from a new decline. It is the wave marking that now speaks of the urgent need to build an upward wave.
I can also assume that because wave b turned out to be deeper than expected, the market did not consider it necessary to additionally buy the dollar against the background of the "hawkish" results of the Fed meeting. Jerome Powell assured the market that the Fed will not deviate from the planned plan and will continue raising rates until inflation shows a significant slowdown. This may cause a recession in the American economy, but for the Fed, the main goal now is inflation. Already next month, the regulator may raise the rate again and bring it up to 2.25-2.5%, but just for this month, the wave c we need can be built, after which the decline of the instrument will resume.
General conclusions.
Based on the analysis, I conclude that the construction of the downward trend section is completed. If so, then now you can buy a tool with targets located near the estimated mark of 1.0947, which equates to 161.8% Fibonacci, for each MACD signal "up". Wave c-b is presumably completed. An unsuccessful attempt to break through the level of 261.8% indicates that the market is not ready for new sales of the instrument.
On a larger scale, it can be seen that the construction of the proposed wave E has been completed. Thus, the entire downtrend has acquired a complete look. If this is true, then in the future for several months the instrument will rise with targets located near the peak of wave D, that is, to the 15th figure.
