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 developed a noticeable correction and a highly expanded aspect. 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 increased in the first three weeks of 2023, and during this time the instrument only managed to move marginally lower from previously established levels. 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.
On Tuesday, the euro/dollar instrument had a 10 basis point spread, and its daytime amplitude was 20 points. Up until now, the news background has been extensive but extremely dull. Business activity indices aren't the most crucial data for the foreign currency market, to start with. The majority of the time, when they obtain unexpected values, market participants respond to them. Today, there were no unexpected values, and thus there was also no response.
In Germany, the composite index increased to 49.7 points, the services sector index increased to 50.4 points, and the manufacturing sector index decreased to 47 points. The critical mark of 50 was reached by one index out of three, while the other two stayed below it. The manufacturing sector's index of business activity in the European Union increased to 48.8, the services sector's index increased to 50.7, and the composite index increased to 50.2. But did the European currency exhibit positive dynamics across all three indices? No. If a movement of 20–30 points may be referred to as a "drop in demand," then it experienced a decrease in demand throughout the day. Therefore, it would be more accurate to conclude that the markets had no interest in these numbers at all and had no knowledge of the expansion of commercial activity in the European Union.
Today is already the fourth or fifth consecutive day since the start of last week that Christine Lagarde will be delivering a speech. Its core won't be all that different from earlier performances, in my opinion. Most likely, the ECB will announce that the rate will be increased at least twice more by 50 basis points and that the war against inflation is in full swing. There is nothing new at all. There are, in my opinion, not many recent, significant data points and messages. All that is left to do is wait until the central bank meets the following week.
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. When there is a failed effort to break through the level of 1.0950, the market is prepared to finish the wave e.
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.
