The events of the last 6-7 days have completely overshadowed the most important event of the current week – the meeting of the European Central Bank, which will end on Thursday. First there was Federal Reserve Chairman Jerome Powell's speeches in the US Congress, during which he almost managed to promise a rate hike of 50 basis points, and then take back his promise, saying that nothing has been decided yet. On Friday, the market was in a state of shock from the US unemployment report, completely forgetting about another equally important indicator – the Nonfarm Payrolls. On Saturday and Sunday, the market was resting, but on Monday, it fell into a new panic due to the bankruptcy of Silicon Valley Bank and Signature Bank in the United States. And today – I came back to normal and soberly assessed the entire news background, coming to the conclusion that such a strong decline in demand for the US currency was illogical. The ECB's second meeting of the year will be held on Thursday.

The market has been aware of a 50 basis point rate hike for a long time. Back in January, ECB members started to openly declare a 125-point increase at the next three meetings. I won't even rule out that the euro's growth in the last few weeks was associated with bets on this decision, which has not yet been announced. However, EUR/USD needed to build a correction wave in order to be able to resume the decline later. So now no one doubts that the rate will rise to 3.5%, but this decision has long been won back by the market. And now we can observe quite a logical phenomenon when an important decision is played out in advance – a movement in the opposite direction. After all, if you think about it, the rate hike is a positive factor for the euro, so the demand for it should grow...

The majority of economists polled by Reuters agree with that. All 60 economists surveyed said the rate will rise by 50 basis points on Thursday. Also, most economists believe the central bank will implement three more quarter point hikes this year: in May, June and July, meaning it will peak at 4.25%. Take note that about a third of economists believe the rate will rise more than is currently expected, while another third believes it will be weaker. And virtually all of those surveyed said that there are risks of more significant interest rate hikes. Experts also lowered their 2023 recession forecast to a 34% probability.

Based on that (given that there are no surprises before the ECB meeting), what's more important is ECB President Christine Lagarde's speech. Economists will focus on her speech. If she toughens her rhetoric or hints at a stronger rate hike, the demand for the euro might rise again. But I don't expect such a scenario.

Based on the conducted analysis, I conclude that we have finished building the uptrend. So now we can consider short positions with targets located near the calculated level of 1.0284, which corresponds to 50.0% of Fibonacci. At this time, correctional wave 2 or b may still be under construction, in which case it will take a more extended form. It is better to open shorts on the MACD's bearish signals.

The wave pattern of GBP/USD suggests a downtrend being built. At this time, it is possible to consider shorts with targets located near 1.1641, which equates to a Fibonacci 38.2% reversal of the MACD to the downside. A Stop Loss order could be placed above the peaks of waves e and b. Wave c may take a less extended form, but for now I expect a decline of another 300-400 points at least (from the current marks).