empty
08.02.2022 07:29 PM
EUR/USD analysis on February 8. The market froze, there is no news

This image is no longer relevant

The wave marking of the 4-hour chart for the euro/dollar instrument has undergone certain changes, but nothing drastic. In the last week, a fairly strong increase in quotes continued. Thus, wave e-C is recognized as completed, since it turned out to be about the same size as the previous wave d-C. Therefore, the current upward wave is either D or 1. In the first case, the increase in the euro currency may already be completed. The picture below clearly shows that the correction wave B turned out to be shortened. The same can happen with wave D. An unsuccessful attempt to break through the 1.1455 mark, which corresponds to 76.4% Fibonacci, may become the second in recent weeks and lead to a departure of quotes from the reached highs, as well as to the end of the current wave. Thus, the wave marking now indicates a decline in quotes. And depending on how strong this decline will be, it will be possible to talk about which wave is being built now. The proposed wave D may turn out to be three-wave, but for now, this option looks like a backup.

The market can only wait for the US inflation report

The euro/dollar instrument fell by 30 basis points on Tuesday. Market activity remains very weak. The instrument continues its unhurried departure from the previously reached highs. Since the news background is now almost completely absent, the weak activity of the market does not raise any questions. In this case, if the market does not find reasons to trade more actively, it remains only to rely on those economic events that will take place this week. And the list here, I must say, is small. On Thursday, the US will release an inflation report for January. And perhaps that's all. I don't take into account those reports that the market reacts to once a year. But what can we expect from the inflation report? Forecasts suggest that this indicator will continue to grow and will amount to 7.3% y/y by the end of January. How will this affect the demand for the dollar? I believe that the only thing that can be expected with such a value of the indicator is a new increase in the US currency. There are two reasons for this. First, the wave markup now implies an increase in the dollar. Second, rising inflation will mean that the Fed will have to act even faster and even more aggressively in changing the parameters of monetary policy. The more inflation rises, the more difficult and longer it will be to bring it back to 2%, which is the "target" for the Fed. Therefore, I expect a slight decline in the instrument until Thursday, and on Thursday it may intensify. What will happen next largely depends on a successful or unsuccessful attempt to break through the 1.1314 mark, which corresponds to 100.0% Fibonacci.

General conclusions

Based on the analysis, I conclude that the construction of the ascending wave C is completed. However, wave D may already be completed too. If so, now is a good time to sell the European currency. At least with a target located near the 1.1314 mark. Another upward wave can be built inside wave D. And if the current wave is recognized not as D, but as 1 as part of a new upward trend segment, then a new upward wave is guaranteed to go beyond the peak of February 4. Thus, now cautious sales are ready for new purchases.

This image is no longer relevant

On a larger scale, it can be seen that the construction of the proposed wave D has now begun. This wave can be shortened or three-wave. Considering that all the previous waves were not too large and were approximately the same size, the same can be expected from the current wave. There are reasons to assume that wave D has already been completed, but a further increase in quotes will force us to reconsider this assumption.

Chin Zhao,
Analytical expert of InstaForex
© 2007-2025
Select timeframe
5
min
15
min
30
min
1
hour
4
hours
1
day
1
week
Earn on cryptocurrency rate changes with InstaForex
Download MetaTrader 4 and open your first trade
  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    JOIN CONTEST

Recommended Stories

GBP/USD Analysis on May 22, 2025

For the GBP/USD pair, the wave structure continues to suggest the development of a bullish impulsive trend. The wave pattern is nearly identical to that of EUR/USD. Until February

Chin Zhao 18:12 2025-05-22 UTC+2

EUR/USD Analysis on May 21, 2025

The wave pattern on the 4-hour chart for EUR/USD has transformed into a bullish structure and continues to remain so. I believe no one doubts that this transformation occurred solely

Chin Zhao 18:56 2025-05-21 UTC+2

GBP/USD Analysis on May 21, 2025

wave structure, largely driven by Donald Trump. The wave setup is nearly identical to that of EUR/USD. Until February 28, we observed the formation of a convincing corrective structure that

Chin Zhao 18:51 2025-05-21 UTC+2

GBP/USD Analysis on May 20, 2025

The wave pattern for GBP/USD continues to indicate the formation of a bullish impulsive wave structure, thanks to Donald Trump. The wave picture is almost identical to that

Chin Zhao 19:47 2025-05-20 UTC+2

EUR/USD Analysis on May 20, 2025

The wave structure on the 4-hour EUR/USD chart has transformed into a bullish one and continues to maintain that shape. I believe there is no doubt that this transformation occurred

Chin Zhao 19:40 2025-05-20 UTC+2

EUR/USD Analysis on May 19, 2025

The wave pattern on the 4-hour chart has transformed into a bullish structure and remains as such. I believe there is no doubt that this transformation occurred solely

Chin Zhao 18:26 2025-05-19 UTC+2

Weekly Forecast Using Simplified Wave Analysis for GBP/USD, AUD/USD, USD/CHF, EUR/JPY, EUR/GBP, and the US Dollar Index on May 19th

GBP/USD Analysis: Since April 8, GBP/USD has been moving upward on the price chart. From the lower boundary of the potential reversal zone, a counter-correction has been forming

Isabel Clark 11:43 2025-05-19 UTC+2

Weekly Forecast Using Simplified Wave Analysis for EUR/USD, USD/JPY, GBP/JPY, USD/CAD, NZD/USD, and Gold on May 19th

EUR/USD Analysis: Since February, the EUR/USD chart has been forming an upward wave. Over the past month and a half, a corrective segment (B) has been developing within this wave

Isabel Clark 11:40 2025-05-19 UTC+2

GBP/USD Analysis on May 16, 2025

The wave structure for the GBP/USD instrument continues to indicate the formation of a bullish impulsive wave sequence. "Thanks" to Donald Trump, the wave pattern closely mirrors that of EUR/USD

Chin Zhao 18:43 2025-05-16 UTC+2

EUR/USD Analysis on May 16, 2025

The wave structure on the 4-hour chart for the EUR/USD pair has transformed into an upward one and continues to hold this formation. I believe there is little doubt that

Chin Zhao 18:40 2025-05-16 UTC+2
Can't speak right now?
Ask your question in the chat.
Widget callback
 

Dear visitor,

Your IP address shows that you are currently located in the USA. If you are a resident of the United States, you are prohibited from using the services of InstaFintech Group including online trading, online transfers, deposit/withdrawal of funds, etc.

If you think you are seeing this message by mistake and your location is not the US, kindly proceed to the website. Otherwise, you must leave the website in order to comply with government restrictions.

Why does your IP address show your location as the USA?

  • - you are using a VPN provided by a hosting company based in the United States;
  • - your IP does not have proper WHOIS records;
  • - an error occurred in the WHOIS geolocation database.

Please confirm whether you are a US resident or not by clicking the relevant button below. If you choose the wrong option, being a US resident, you will not be able to open an account with InstaForex anyway.

We are sorry for any inconvenience caused by this message.