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EUR/USD analysis on June 29. Inflation in the European Union is still alarming, and the ECB is still cautious.

Relevance up to 10:00 2022-06-30 UTC–4

The wave marking of the 4-hour chart for the euro/dollar instrument continues to look convincing and does not require adjustments. In addition, the markup has not changed in recent weeks, as the market is completely calm. The instrument has completed the construction of a downward trend segment. If the current wave marking is correct, then the construction of a new upward trend section continues at this time. 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 has now begun. 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. But at the moment, the chances of building an upward wave c remain. Only the news background can interfere.

Lagarde’s speeches and European inflation.

The euro/dollar instrument fell minimally on Wednesday, only a few dozen basis points. Nevertheless, this is another decline in the euro currency, which, according to the current wave markup, we do not need. Let me remind you that it is necessary to increase the demand for the euro currency, and not vice versa. However, two speeches by Christine Lagarde at the beginning of the week, as well as the report on US GDP in the first quarter failed to convince the market of the need to buy, not sell. So far, the euro currency is balancing. It is located at a sufficient distance from the low of wave b, but not far enough so that the option of complicating the downward trend section is not considered at all. Today, the news background in its headlines should have been very strong. The US GDP report has already surprised the markets, as it turned out to be even worse than previously expected. And expectations decreased from assessment to assessment (there were three in total). However, the demand for the US currency this week did not become lower from this. And this is a big problem for the current wave pattern.

Today, literally at these very hours, Christine Lagarde is speaking at an economic forum, but the market does not seem to expect any interesting information from her. Let me remind you that Lagarde made it clear to the markets that the ECB will not sit on the sidelines while inflation updates records. At the same time, it did not give the market confidence that the regulator would do everything necessary to overcome rising inflation. Her rhetoric is not tough enough, and the current circumstances require a tough approach. Thus, if you look at the news background, it is unlikely that it will support the demand for the euro. If we look at the wave pattern, then the increase of the instrument is still possible.

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”, counting on the construction of wave C. Wave b is presumably completed. An unsuccessful attempt to break through the level of 261.8% indicates that the market is not ready for stronger 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 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.

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

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