Forex Analysis & Reviews: 08.05.2022 - EUR/USD analysis on May 8....

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08.05.2022 03:47 PM

EUR/USD analysis on May 8. American statistics: not strong enough for the dollar to rise again.

The wave marking of the 4-hour chart for the euro/dollar instrument continues to look convincing. The instrument continues the construction of the descending wave 5-E, which is the last in the structure of the descending trend section. If this is true, then the decline in the quotes of the euro currency may continue for another week, since this wave turns out to be a five-wave in its internal structure. At the moment, there are four internal waves visible inside this wave, so I'm counting on building another pulse wave. A successful attempt to break through the 1.0721 mark, which equates to 200.0% by Fibonacci, indicates that the market is ready for further sales of the euro currency. In the coming days, the instrument may decline to the level of 1.0355, and there only 350 basis points will remain to price parity with the dollar. Presumably, the construction of the current downward wave and the entire downward section of the trend can be completed near this mark. If the breakout attempt of 1.0355 turns out to be successful, the instrument will further complicate its wave structure and continue to decline.

Payrolls in the USA did not disappoint.

The euro/dollar instrument rose by 10 basis points on Friday. Yes, this is not a typo, it is 10 points, although the market activity was again at a height, the amplitude was almost 60 points. It should be noted that the tool has been moving very actively all this week, as there have been more than enough important events. Even if they did not please the market every day, they were very important, so their development was delayed for a long time, and not for 15-30 minutes, as usually happens when a report is released. Demand for the European currency mainly grew on Friday, but the instrument declined at night. It also declined after the release of American statistics, which turned out to be not super-beautiful, but at the same time very strong. The unemployment rate remained at 3.6%, although some expected it to fall to 3.5%. I think this is a very good value in any case, so it would be simply inadequate to expect a further decline in the indicator and get upset if this does not happen. The number of payrolls in April was 428K with slightly lower market expectations - also very good. Wages rose by 0.3% in April against market expectations of 0.4% - a slight discrepancy. Therefore, in general, the statistics turned out to be very decent and personally I am surprised that the demand for the American currency has increased only slightly. However, the US currency has been growing very briskly in recent weeks, so once the market could afford to rest and not finish off the European currency. If the current wave marking is correct and will not become more complicated in the future, then the decline of the euro currency will end soon. Of course, new negative geopolitical data may lead to a new decrease in demand for the EU currency. No one is immune from this, and no matter what the wave marking is, it can always take a more complex form. But at the moment, I believe that the construction of the downward trend section is being completed. Next, I expect the euro to rise, even if the news background does not support it.

General conclusions.

Based on the analysis, I still conclude that the construction of wave 5-E. If so, now is still a good time to sell the European currency with targets located around the 1.0355 mark, which corresponds to 261.8% Fibonacci, for each MACD signal "down". The construction of the proposed wave 4-5-E may have already been completed.

On a larger scale, it can be seen that the construction of the proposed wave D has been completed, and the instrument regularly updates its low. Thus, the fifth wave of a non-pulse downward trend segment is being built, which turns out to be as long as wave C. The European currency will still decline for some time.

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*Disclaimer: The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.