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19.01.202307:05 Forex Analysis & Reviews: EUR/USD. Analysis for January 19, 2023

Exchange Rates 19.01.2023 analysis

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 taken on a powerful corrective and extended 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 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 was increasing again in the first week of 2023, and the instrument was only able to deviate somewhat from its prior highs during this time. 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 Eurozone's inflation rate dropped to 9.2%.

Despite having a high amplitude throughout the day on Wednesday, the euro/dollar instrument did not change in value. Just like that, demand for the euro rose in the morning while demand for the dollar rose in the afternoon. Two motions in separate directions that were almost identical were received. Since wave e is still under construction, it cannot be said to be finished. Since the data for the same month of December had already informed the markets of a decline to 9.2%, many experts did not pay the report on European inflation the proper attention. The final evaluation and the original one agreed. However, this report continues to be crucial in my opinion, which is why.

Because central banks "dance" on inflation, it is currently a top concern in many countries around the world. Therefore, it is irrelevant whether it is the first or second assessment. The most important development is that inflation has begun to fall and is doing so swiftly. Perhaps Andrew Bailey and Christine Lagarde were correct when they predicted that lower energy prices would lead to lower inflation (which we are now seeing). Similar remarks were made by the ECB president at the same time last year. Since the ECB won't need to hike rates in increments of 75 or 50 basis points anymore, I think that over time, the European Union's declining inflation rate will start to put pressure on the euro. But as of now, inflation is still too high, so a slowdown in the rate of interest rate hikes is out of the question. Even if the consumer price index experiences a new, significant slowdown the next month, I believe the plans to increase the rate in the European Union by another 100-125 basis points will stand. However, the ECB might then decide to tighten by 25 points.

Exchange Rates 19.01.2023 analysis

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 indicating a "down" trend, it is now viable to contemplate sales with targets close to the predicted 0.9994 level, or 323.6% 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 the downward trend segment can start.

*Phân tích thị trường được đăng tải ở đây có nghĩa là để gia tăng nhận thức của bạn, nhưng không đưa ra các chỉ dẫn để thực hiện một giao dịch.

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