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29.02.202416:41 Forex Analysis & Reviews: EUR/USD. Analysis for February 29th. German statistics have failed again

The wave analysis of the 4-hour chart for the EUR/USD pair remains unchanged. Over the past year, we have seen only three wave structures that constantly alternate with each other. The construction of another three-wave structure continues – a downtrend, which began on July 18 of last year. The assumed wave 1 is completed, wave 2 or b has complicated three or four times, but at the moment, it is also completed, as the pair's decline has been ongoing for over a month.

The upward section of the trend may still resume, but its internal structure will be unreadable in this case. I want to remind you that I strive to highlight unambiguous wave structures that do not tolerate dual interpretation. If the current wave analysis is correct, the market has moved on to forming wave 3 or c. Currently, the presumed wave 2 in 3 or c is being built. If this is indeed the case, an unsuccessful attempt to break the 61.8% Fibonacci level may indicate the completion of this wave. In any case, the decline in the pair's quotes should be completed later. Or the wave analysis will be noticeably complicated.

The decline in the euro looks unconvincing.

The exchange rate of the EUR/USD pair changed by just ten basis points on Thursday. The day began with increased demand for the euro, although the news background from the beginning spoke to the contrary. Nevertheless, in the morning, the market bought euros. However, retail trade in Germany decreased by 0.4% in January (market expectations were +0.5%), the unemployment rate rose to 5.9% (expectations were 5.8%), and the number of unemployed increased by 11 thousand against the expected 7 thousand. As we can see, all three of the most important reports were weaker than expected, which should have caused a decline in the euro, not growth.

Closer to the second half of the day, the decline in the euro still began, as another report was released in Germany, which supported the sellers. The consumer price index in February was 2.5% instead of the expected 2.6%. The decrease compared to January was 0.4%, which is quite a lot. Based on this, the ECB has become one step closer to quickly softening its policy. The more time passes, the fewer reasons the European regulator has to keep the rate at its peak. If inflation has already approached the target mark, then in the near future, the first reduction in interest rates may follow.

For the market, such information is another reason to reduce demand for the euro. Today, based on all the information received, the decline in the euro could and should have been much stronger. The wave analysis supports the pair's decline, so practically all the most important factors now point downward.

Exchange Rates 29.02.2024 analysis

General conclusions.

Based on the EUR/USD analysis, the construction of a downtrend wave set continues. Wave 2 or b has taken a completed form, so in the near future, I expect the continuation of the construction of an impulsive downtrend wave 3 or c with a significant decline in the pair. An internal corrective wave is being built, which could have already been completed. I consider only sales with targets around the calculated level of 1.0462, corresponding to 127.2% Fibonacci.

On a larger wave scale, the assumed wave 2 or b, which in length exceeded 61.8% Fibonacci of the first wave, may be completed. If this is the case, then the scenario with the construction of wave 3 or c and a decline in the pair below the 4th figure has begun to unfold.

*El análisis de mercado publicado aquí tiene la finalidad de incrementar su conocimiento, más no darle instrucciones para realizar una operación.

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