The European currency spent the entire last week in the stage of building a corrective wave. I believe that the unsuccessful attempt to break through the level of 1.0880, which corresponds to 61.8% according to Fibonacci, indicates the market's readiness to form wave 3 in 3 or c. If this is indeed the case, the decline in the quotes of the European currency may resume next week. However, one should keep in mind the news background, which tends to influence market sentiment. Therefore, let's consider the main events in the next five days.

Note that there will be a few promising events. The week will start with a career-related speech by European Central Bank President Christine Lagarde. Lagarde will likely have nothing new to say to the market if we are talking about new information. Since her last speech, too little time has passed, and no new reports from the European Union have been received during this period.

However, Lagarde may still present a surprise. Therefore, this event should be treated with full attention. Characterizing her rhetoric is very difficult because everything now depends on economic statistics. There is no new data, so predicting the prevailing tone of her speech is practically impossible.

The next important event will the inflation report for February in the preliminary estimate, to be released Friday. According to market expectations, inflation may decrease to 2.5%, and core inflation to 2.9%. If market expectations are confirmed, then a sharp decline in demand for the European currency can be expected. The only "but" is that the fall of the euro may start much earlier than Friday.

And if the forecasts are justified, the market may play them out in advance. In this case, only a lower inflation figure will be able to cause a new decrease in demand for the European currency. Any higher value, of course, can lead to a departure of quotes from the reached lows. And, of course, one should remember about economic statistics from the United States. I believe that the euro has a high chance of further decline.

Wave pattern for EUR/USD:

Based on the analysis of EUR/USD, I conclude that the formation of a bearish wave set continues. Wave 2 or b has taken a completed form, so I expect the continuation of building the impulse downward wave 3 or c with a significant decrease in the instrument. Currently, another internal corrective wave is being formed, which may end soon. I consider only sales with targets around the calculated level of 1.0462, corresponding to 127.2% Fibonacci.

Wave pattern for GBP/USD:

The wave pattern of the GBP/USD instrument still suggests a decline. Currently, I am considering selling the instrument with targets below the level of 1.2039 because wave 2 or b cannot last forever, just like a sideways trend. A successful attempt to break through the level of 1.2627 became a signal for sales. However, at the moment, a new sideways trend is also observed with the lower boundary at the level of 1.2500. This level is currently the limit for the decline of the British pound. Wave 3 or c of the downward trend has not yet begun.