The wave marking on the euro/dollar instrument's 4-hour chart still appears to be fairly accurate, and the entire upward phase of the trend is still highly complex. It now has a clear, corrected, and lengthened form. The waves a-b-c-d-e have been combined into a complicated corrective structure, with wave e having a form that is far more complex than the other waves. Since the peak of wave e is substantially higher than the peak of wave C, if the existing wave arrangement is accurate, construction on this structure may be nearly finished or may already be finished. I'm getting ready for a decrease in the instrument because, in this scenario, we are predicted to build at least three waves down. Yesterday, the instrument fell as a result of a sharp decline in demand for the euro. These two marks, along with a failed attempt to surpass the Fibonacci level of 200.0% (1.0726), could indicate the end of the development of the upward trend section. Now, nevertheless, US dollar demand must increase further. The context of the news this week enables us to anticipate such a result.
Although there isn't much new information right now, a correction must be made.
On Tuesday, the euro/dollar instrument decreased by 120 basis points. This is the first high amplitude in nearly three weeks. It is clear that the market has resumed its regular operating procedures and moved past the New Year's vacations. Although market activity has already significantly decreased today, the instrument does not have to pass 150 points every day. I can only make a note of the index of business activity in the US manufacturing sector yesterday, which continued to decrease as expected, negating the possibility of a market reaction in the shape of a rise in dollar demand. There were other news items as well, most notably a study on German inflation that caught the attention of analysts all over the world. Although this report was released a few hours after the euro's losses began, many individuals seemed to believe that it was related to a decline in demand for the currency for some reason.
The speech of IMF President Kristalina Georgieva, who observed the slowdown in the economies of the European Union, China, and the United States and came to unfavorable conclusions about the future of global GDP, is also covered by the international media. However, I don't find anything particularly surprising here either, as the recessions that will affect the world's greatest economies have been widely anticipated for more than a year. Considering everything mentioned above, I conclude that Tuesday's news was unlikely to be the reason why the euro/dollar instrument and, by the way, the pound/dollar instrument also declined. The underlying cause of the decrease, however, may very well be the wave marking, which has been signaling a decline in the instrument and the formation of a downward trend section for several weeks. I observe that the downward reversal happened close to the projected wave e. As a result, the market was reluctant to add to the wave's complexity by making more purchases. I continue to support a scenario when the tool drops to around two figures.
General conclusions
Based on the analysis, I conclude that the rising trend section's construction has multiplied into five waves and is either finished or nearly so. As a result, I suggest making sales with objectives close to the predicted 0.9994 level, or 323.6% Fibonacci. We have a signal for a drop and a departure of quotes from the recent highs, while there is a chance that the rising phase of the trend will become even more lengthy and complicated. The likelihood of this scenario is still pretty high.
The wave marking of the descending trend segment notably becomes more intricate and lengthens at the higher wave scale. The a-b-c-d-e structure is most likely represented by the five upward waves we observed. After the construction of this portion is complete, work on the downward trend segment can start.
