The wave analysis of the 4-hour chart for the euro/dollar pair continues to get complicated due to the latest upward waves. These waves could be an independent upward trend segment (since the last downward trend can be considered a three-wave and completed), and they could also be completed if it takes a three-wave form. Thus, the wave pattern for the euro currency can become very complex, and it isn't easy to work with it now. At the current positions, the formation of an upward set of waves may be complete since the third wave's peak went beyond the first's peak. We saw the same thing in the last downward formation (minimal update of the low and completion of the segment). At the same time, there are other options for wave analysis. For example, a full-fledged five-wave (but also a corrective) structure. It is advisable to proceed from the scenario with the pair's decrease because the ascending three-wave looks complete and finished. Consequently, a new downward three-wave formation may begin, and the unsuccessful attempt to break through the 1.1030 mark indicates the market's readiness to sell.
The euro/dollar pair on Thursday rose by 30 basis points. The amplitude of movements was weak again, and the pair regularly threw from side to side. The market needs clarification and help to figure out what to do with the pair. The wave analysis provides a certain scenario, but the market must agree. Wave analysis is just a graphical representation of market actions. The market itself moves the pair, not the waves. As I said, the current upward structure can easily transform into a five-wave. Any structure can transform into a more complex one. We need to use wave analysis to identify the most likely scenario for developing events and try to play it. Now the most likely scenario is a decline.
The news background on Thursday could have been more varied, explaining the low movement amplitude. I can only note the speech of ECB member Klaas Knot, who spoke about the prematureness of talks about a pause in raising interest rates. I cannot conclude the seriousness and globality of this statement, as the regulator raised the rate by 50 basis points at the last meeting. It will not stop tightening in May; at most, it will reduce the pace. Knot did not answer how much the rate will increase in May, only noting the excessively high inflation and calling the current rate "moderately restrictive," which will be insufficient to counter inflation. He noted that the rate needs to be raised more than now, but he could not say by how much. The market already possesses this information. The demand for the euro increased slightly but was too weak to talk about a new upward wave.
Based on the analysis conducted, the upward trend segment was formed. Therefore, it is advisable to sell now, as the pair has ample room for decline. The target of 1.0600 can be considered quite realistic. With this goal in mind, I advise selling the pair on reversals of the MACD indicator "down" until the quotes successfully attempt to break through the 1.1030 mark, which may not happen.
On the older wave scale, the wave analysis of the ascending trend segment has taken an extended form but is likely complete. We saw five waves up, which are most likely the structure a-b-c-d-e. The formation of the downward trend segment may still need to be completed, and it can take any form in terms of structure and extension.