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EUR/USD analysis on June 18. Jerome Powell can’t stop inflation and the growth of the dollar yet.

Relevance up to 07:00 2022-06-20 UTC–4

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 indeed the case, then at this time the construction of a new upward trend section 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 visible. Wave A is completed, and wave b is also presumably completed. If this is indeed the case, then the construction of an ascending wave c should begin now. The instrument has not decreased under the low of the descending trend section, so the wave marking still retains its integrity. However, I note that the downward section of the trend may complicate its internal wave structure and take a much more extended form. Unfortunately, a 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.

Jerome Powell repeats the same thing in each of his speeches.

The euro/dollar instrument fell by 55 basis points on Friday. From the point of view of waves, such a movement means absolutely nothing. I assume that wave b is completed, and the targets of wave c are located above the peaks of wave a, that is, 300 points above the current marks. Thus, until a successful attempt to break through the 1.0355 mark, which corresponds to 261.8% Fibonacci, I still expect an increase in demand for the euro currency. However, it is becoming more and more difficult to wait for such a movement every day. Although wave b did not break the wave marking, it turned out to be too deep. The news background for the European currency remains very bad. Especially after the Fed raised the interest rate by 75 basis points and promised to raise it again by 50-75 points next month. Jerome Powell has also been receiving only “hawkish” messages lately. Thus, if you look only at the news background, it will be very difficult for the European currency to rise even by 300 points. Difficult, but not impossible.If only the European Central Bank in the person of Christine Lagarde had at least some support for the euro currency. However, Lagarde barely agreed to follow the requests of the presidents of other central banks of the Eurozone, who insisted on raising the rate in the coming months. However, this is not enough to compete in this issue with the Fed, which tightens monetary policy every month while the ECB hesitates and thinks. And the question of inflation. It is no longer as important as it was a few months ago. If a few months ago everyone was terrified of another increase in this indicator, now it seems that no one is afraid of inflation even at 10%, since there is not such a big difference between 10% and 8%. No matter how much the Fed raises the rate, so far inflation is only accelerating. Then what difference does it make how much it will be in the end?

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 downward trend has acquired a complete look. If this is indeed the case, 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.

*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.

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