Forex Analysis & Reviews: 26.01.2023 - EUR/USD. Analysis for...

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26.01.2023 12:54 PM

EUR/USD. Analysis for January 26. The market does not want to be objective

The wave marking on the euro/dollar instrument's 4-hour chart is still quite compelling and getting more intricate, and the entire upward segment of the trend is still quite convoluted. Although its length is better suited for the pulse portion, it has developed a noticeable correction and a highly expanded aspect. 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 wave markings are accurate, construction on this structure may be nearly finished. I'm still planning for a decline in the instrument because we are predicted to build at least three waves down in this scenario. The demand for the euro currency increased in the first three weeks of 2023, and during this time the instrument only managed to move marginally lower from previously established levels. A new attempt to surpass 1.0721, which according to Fibonacci amounts to 200.0%, was successful, allowing the wave e to take on an even longer form. Unfortunately, there is another delay in starting to build the trend correction part.

The GDP report could cause the dollar to drop again.

On Wednesday, the euro/dollar instrument increased by 30 basis points. It may not seem like much, but a chart of the instrument may clearly show what is occurring in the foreign currency market, even though 30 points may not look like much. The value of the euro is still rising. It virtually always does things, albeit slowly and inefficiently. 150 points in a week are equal to 30 points daily. The present trend segment has hardly any dropping waves.

There is nothing more to say at this time, so I won't bring up the subject again. The market remains convinced that the ECB rate will increase by 50 basis points next week, but only by 25 at the Fed rate. The market is also sure that the ECB will once again hike interest rates by 50 basis points at its meeting in March, whereas the Fed will only do so by 25. Based on this, the demand for the euro remains high and might be slowly growing. I think that the market has had enough time to recover from this issue (rate rises by various central banks). I find it astonishing that the EUR/USD instrument, which I called with my last bit of might, has increased. We are seeing such a gradual upward movement because the market can no longer boost demand at the rate it could a month or two ago, but it won't decrease it either. How long this rise in quotes will last, in my opinion, is the current big question. The only thought that comes to mind is the upcoming ECB and Fed meetings. The market has already factored in future rate increases numerous times, according to many analysts. If this presumption is accurate, the downturn ought to start soon. The requirement for creating a set of correction waves is still present.

Conclusions in general

I conclude that the upward trend section's building is about finished based on the analysis. As a result, given that the MACD is signaling "down," it is now possible to contemplate sales with goals close to the predicted mark of 1.0350, or 261.8% per Fibonacci. The potential for complicating and extending the upward portion of the trend remains quite strong, as does the likelihood of this happening. The market will be ready to finish the wave e when a bid to break through the 1.0950 level fails.

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 a downward trend segment can start.

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