The wave marking of the 4-hour chart for the euro/dollar instrument still does not change. However, over the past two days, the quotes of the instrument have increased significantly and broke through the previous peak of the expected wave d. Thus, either wave d should now be recognized as elongated, which still implies its imminent completion, or the entire wave from November 24 should be recognized as the first wave of a new upward trend segment. I still believe that the current wave is corrective, not impulsive, as evidenced by its complex internal wave structure. Therefore, it cannot be wave 1 of a new upward trend segment. If so, the decline in quotes will resume within the framework of the expected wave e-C. At the same time, a further increase in the quotes of the European currency may lead to the need to make adjustments to the current wave markup, since wave d will turn out in this case to be the longest wave in the composition of the downward trend section. An unsuccessful attempt to break through the 1.1455 mark may lead to a departure of quotes from the reached highs, but is it to build a wave e-C?
American inflation continues to accelerate.
The euro/dollar instrument rose by another 30 basis points on Thursday. The demand for the euro currency was already much lower than a day earlier. If this situation lasts for a few more days, then the chances of completing wave d will increase significantly. At the moment, three waves can be distinguished within wave d. If this markup is correct, then wave c to d will end in the near future. How can we not remember that only this week the markets did not pay any attention to the report on American inflation, as well as the speeches of representatives of the US central bank? For example, James Bullard said on Wednesday that he expects four interest rate hikes at once during 2022. I believe that this news alone could increase the demand for the dollar. But that didn't happen. Perhaps because it is necessary to complete the construction of wave d. Thursday's news background was generally weak, which explains the weak amplitude of the instrument. The producer price index rose to 9.7% y/y, and the number of applications for unemployment benefits amounted to 230 thousand. This value turned out to be higher than the markets expected, but not so much higher to talk about it as a negative trend and associate it with the Omicron wave in the United States. It's no secret that the pandemic continues, and because of a new strain of coronavirus, 400 to 500 thousand new cases of the disease are registered every day in America. With such a large number of patients, many companies are experiencing serious problems with the workforce, a significant part of which is on sick leave or self-isolation. In addition, in many companies where at least a few people were infected, the entire staff had to go into quarantine, since Omicron is the most contagious of all known strains. However, these data did not attract the attention of the market today.
General conclusions.
Based on the analysis, I conclude that the construction of the descending wave C can be completed. However, the internal wave structure of this wave still allows the construction of another downward, internal wave. Thus, I advise selling the instrument with targets near the 1.1152 mark, if an unsuccessful attempt is made to break through the 1.1455 mark, which equates to 76.4% Fibonacci.
