FX.co ★ Wave analysis of EUR/USD for September 13. ECB's Schnabel: inflation will start to decline in 2022

The wave counting of the 4-hour chart for the EUR/USD pair remains the same. The pair still passes no more than 50 points per day, which does not allow making any changes. In the last week, we saw a slight decline in quotes, which was caused by an unsuccessful attempt to break through the 38.2% Fibonacci level. Thus, the construction of a downward wave, which may be wave b as part of an upward trend section, is now presumably continuing. The first wave of this section does not yet give grounds to conclude that it will turn out to be impulsive. So far, everything looks as if we will see a new corrective trend, three-wave or five-wave, it does not matter. But with the correction status, the quotes of the instrument are unlikely to be able to continue rising above the 42nd figure, near which the construction of the previous upward trend section was completed. I am also not considering the option of complicating the downward trend section and do not expect a strong decline in the pair. The attempt to break through the level of 1.1805, which corresponds to 23.6% according to Fibonacci, was successful, but wave b may end just below it.

The news background for the EUR/USD pair was practically absent on Monday. We can say that the pair is now moving exclusively under the influence of wave counting. If the current wave b ends in the coming days, then everything will look almost perfect. Another matter is that the currency pair continues to move only with the help of corrective structures, that is, we cannot count on a strong decline in quotes or a strong increase. Nevertheless, it is important for us that the wave counting is, first of all, clear and understandable, so that it can be used not just to trade, but also to earn money. There are no problems with this now.

The only interesting event on Monday was the speech of ECB Executive Board member Isabel Schnabel. According to Schnabel, the inflation rate will significantly decrease in 2022, but this year it may continue to grow. Let me remind you that the latest inflation report showed an increase to 3.0%. By the end of the year, the consumer price index may grow to 4%. Schnabel warned the markets against a harsh interpretation of current inflation, saying that it should be treated with great caution. Earlier, ECB President Christine Lagarde made similar statements, stating that the increase in inflation is due to temporary factors that will sooner or later cease to affect the indicator. It remains only to say that the markets did not react to all these statements in any way. The EUR/USD currency pair first fell by 45 basis points today, and then increased by the same amount.

Based on the analysis, I conclude that the construction of the downward section could have ended around the level of 1.1704, which is equal to 100.0% Fibonacci level. So now I'm still waiting for the construction of an upward set of waves. Therefore, I still advise buying the pair with targets located near the 1.1965 and 1.2027 marks, which corresponds to 50.0% and 61.8% Fibonacci levels, for each MACD signal "up". A successful attempt to break through the level of 1.1805, which corresponds to 23.6% Fibonacci level, will indicate the readiness of the markets to build a wave c.

The wave counting of the higher scale looks quite convincing. We see three three-wave sections of the trend, which are approximately the same in size. However, the last section of the trend quite unexpectedly took a more complex form, but it still ended in the same place as the previous three-wave section.