empty
 
 
21.11.2022 04:16 PM
EUR/USD analysis for November 21. The Fed will increase the rate by 50 points in December

This image is no longer relevant

Changes have been made to the wave pattern on the 4-hour chart for the euro/dollar instrument. The trend's upward component is still developing and has shifted into a corrective form. I initially believed that three waves would grow, but it is already obvious that there are five waves. As a result, the waves a, b, c, d, and e have a complex correction structure. The building of this structure might be nearly finished if this supposition is true because the peak of wave e is higher than wave C. In this instance, we anticipate constructing at least three waves downward, but if the previous phase of the trend was corrective, the following phase would probably be impulsive. As a result, I am getting ready for another significant decline in the instrument. The last ascending wave still needs to be completed, as shown by a successful attempt to breach the 1.0359 level, which corresponds to 261.8% Fibonacci.

Now, it's crucial that the wave markings for the pound and the euro match. You may recall that I frequently cautioned you against expecting the euro and the pound to trade in opposition. Although theoretically feasible, this happens incredibly infrequently in reality. Both instruments are presumably constructing corrective trend sections, which could be finished soon. Therefore, the British pound may also decline within the framework of a new downward trend segment.

Dollars were gradually becoming more and more in demand.

On Monday, the euro/dollar instrument decreased by 75 basis points. Since there was no background news today, it is unclear what caused the US currency to increase. However, the dollar is not rising strongly, so it might be market hysteria. We cannot even say with certainty that wave e has finished its construction due to the instrument's current decline. But for more than a week, the entire upward portion of the trend has appeared to be finished. However, for this to happen, the dollar's demand must increase more significantly than it did on Monday. Furthermore, the issues with this are the same as when the euro currency first gained popularity.

Today, 78 out of 84 leading economists surveyed by Reuters predicted a 50 basis point increase in the federal funds rate in December. I wholeheartedly concur with this prediction, which indicates that the rate of monetary policy tightening in December will start to slow down. It was also revealed that, given the slowdown, most economists anticipate three additional rate increases totaling 100 points. As a result, the rate will rise by 25 points in February and March. This situation may increase demand for the EU currency because the ECB may continue to raise the rate by 75 points at each meeting. There is still about a month before the first-rate divergence that disadvantages the dollar. We hope this month will be sufficient to construct the corrective structure of three waves.

This image is no longer relevant

Conclusions in general

Based on the analysis, the upward trend section's construction has grown more complex compared to the five-wave one and is still going on. However, because the wave markup does not suggest a further increase in quotes, I cannot recommend purchasing immediately. If there is a successful attempt to break through the 1.0359 level, I advise selling with stops close to the estimated 0.9994 level, which corresponds to the Fibonacci level of 323.6%.

The wave marking of the descending trend segment becomes noticeably longer and more complicated 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 section is finished, work on a downward trend section may resume.

Chin Zhao,
Analytical expert of InstaForex
© 2007-2023
EURUSD
Euro vs US Dollar
Select timeframe
5
min
15
min
30
min
1
hour
4
hours
1
day
1
week
Start trade
Start trade
  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    JOIN CONTEST
  • Chancy Deposit
    Deposit your account with $3,000 and get $8000 more!
    In March we raffle $8000 within the Chancy Deposit campaign!
    Get a chance to win by depositing $3,000 to a trading account. Having fulfilled this condition, you become a campaign participant.
    JOIN CONTEST
  • Trade Wise, Win Device
    Top up your account with at least $500, sign up for the contest, and get a chance to win mobile devices.
    JOIN CONTEST
  • 100% Bonus
    Your unique opportunity to get a 100% bonus on your deposit
    GET BONUS
  • 55% Bonus
    Apply for a 55% bonus on your every deposit
    GET BONUS
  • 30% Bonus
    Receive a 30% bonus every time you top up your account
    GET BONUS

Recommended Stories

Elliott wave analysis of UNG for March 22, 2023

Natural gas proxy UNG dropped to a low of 7.17 before turning higher. This kept our preferred count alive, that wave i began from the 7.15 low to the 9.99

Torben Melsted 06:13 2023-03-22 UTC+2

Elliott wave analysis of EUR/USD for March 22, 2023

EUR/USD finally broke above resistance at 1.0760 and should continue higher through resistance at 1.0804 to confirm that wave 4 has been completed and wave 5 towards 1.1244 and possibly

Torben Melsted 06:06 2023-03-22 UTC+2

GBP/USD. Analysis for March 21, 2023

The wave analysis for the pound/dollar pair now appears to be challenging but does not call for any clarifications. The wave patterns for the euro and the pound differ somewhat

Chin Zhao 18:23 2023-03-21 UTC+2

EUR/USD. Analysis for March 21. The euro continues to rise before the FOMC meeting.

The recent increase in the euro's value has caused some confusion in the wave analysis on the 4-hour chart for the euro/dollar pair. Last week, we saw a sharp drop

Chin Zhao 18:03 2023-03-21 UTC+2

Elliott wave analysis of First Republic Bank for March 21, 2023

No doubt that First Republic Bank (FRB) is in great trouble. We thought that it would be an excellent candidate to show the Elliott Wave Principle in practical

Torben Melsted 07:20 2023-03-21 UTC+2

Elliott wave analysis of UNG for March 21, 2023

Natural gas has failed to rally above resistance at 8.97 and remains caught in the possible corrective decline in wave ii. We have revised our outlook as the failure

Torben Melsted 06:57 2023-03-21 UTC+2

GBP/USD. Analysis for March 20, 2023

The wave analysis for the pound/dollar pair now appears to be challenging but does not call for any clarifications. The wave patterns for the euro and the pound differ somewhat

Chin Zhao 18:00 2023-03-20 UTC+2

EUR/USD. Analysis for March 20, 2023

The wave analysis on the 4-hour chart for the euro/dollar pair becomes confused as the euro rises. We saw a sharp decrease in quotes last week, which may be seen

Chin Zhao 17:43 2023-03-20 UTC+2

Elliott wave analysis of EUR/JPY for March 20, 2023

EUR/JPY finally broke below the flag support line and should continue lower towards our long-term target near 133.55, with the first hurdle seen near the former low at 137.47. Short-term

Torben Melsted 06:09 2023-03-20 UTC+2

Elliott wave analysis of EUR/USD for March 20, 2023

EUR/USD is in a position where we have two possible scenarios. We could have seen the low of wave 4 with the failure spike down to 1.0542, our preferred count

Torben Melsted 06:02 2023-03-20 UTC+2
Can't speak right now?
Ask your question in the chat.