The wave pattern on the 4-hour chart for the euro/dollar pair continues to become more complicated due to the latest ascending waves. These waves could be the beginning of a new upward section of the trend (since the last downward one can be considered three-wave and completed), but at the same time, this section of the trend may end soon if it also takes on a three-wave shape. Thus, the wave picture for the euro currency can become very complex, and working with it now isn't easy. At the current positions, the formation of an upward set of waves could be completed as the peak of the third wave went beyond the peak of the first. The same thing was seen in the last downward formation. At the same time, there are other options for wave analysis. It is now appropriate to rely on the scenario with an increased pair because the assumed wave c (descending set of waves) was very weak. Consequently, buyers are stronger than sellers, and the ascending wave c could be extended more. The nearest target to consider is the peak of wave e, which corresponds to 1.1033.

The holidays are over, and the European currency is growing rapidly. The euro/dollar pair on Thursday increased by another 30 basis points after rising by 80 the day before. Yesterday's most important report of the week was released – inflation in the US. The consumer price index fell to 5%, which caused a decline in demand for the dollar as the market now does not expect an interest rate hike in May. Whether this is true or not, we will find out later. Still, at this time, the market believes that the FOMC may have completed the cycle of tightening monetary policy in March and, in a few months, may begin considering the possibility of lowering the rate. In favor of easing policy are the high risks of a banking crisis in the US. The FOMC did everything it could to ensure that the collapse of the three banks had minimal and soft consequences for the economy and the financial sector. Still, many analysts fear that lending will fall due to deposit outflows and a loss of confidence in the banking system. This, in turn, will lead to a reduction in GDP. However, I have no specific signals about a rate cut yet.

Today, the Eurozone released its February industrial production report, which turned out to be slightly better than market expectations (1.5% versus 1.0% m/m). This data could also increase demand for the euro currency, which reached the 1.1033 mark today. A successful attempt to break through this level will indicate the market's readiness to maintain high demand for the pair. At the same time, the final estimate of inflation in Germany in March was 7.4%, which means a drop in the indicator of 1.3% in just one month. This report could have caused a decrease in demand for the euro currency, as the ECB interest rate in May may also slow down its growth. But the market prefers not to notice this – it is too busy buying EU currency.

General conclusions.

Based on the analysis, the formation of an upward trend section continues, which can only take a three-wave form and end soon. Therefore, now both selling and buying can be equally recommended. The news background does not answer which direction the pair will move. Wave analysis doesn't either. In the current situation, I recommend cautious purchases if the attempt to break through the 1.1033 mark is successful. An unsuccessful attempt to break through the 1.1033 mark will indicate the possibility of opening sales.

On the larger wave scale, the wave pattern of the ascending trend section has taken on an extended form but is probably complete. We saw five waves up, which are most likely the a-b-c-d-e pattern. The formation of the downward trend section may still need to be completed, and it can take any form in terms of pattern and length.