Watch Euro Dollar 1.0341

In previous posts we have been talking about bullish narratives for EURUSD. The main theme is that the move lower since the high at 1.2349 labelled red b has been corrective in nature. Meaning that the move lower is not a trend move and the implication is that at some point price is possibly expected to bottom and then move higher. Thus re-starting the trend move higher. However, the Russian war has encouraged investors to sell EURUSD. In Elliott Wave terms wave 2 (here shown as blue wave II) must not exceed the origin of wave 1 (blue wave I). In this case, if price trades at 1.0340 the bullish narrative will have been proven wrong and it is feasible that the analysis will start to point to lower prices. Including the level that you are most probably thinking of!

The cycle analysis is still suggesting that this current move lower is a short term move and that it is possible for a 20 week low to occur at the end of April/start of May. So, both styles of technical analysis are suggesting a credible low between current levels (1.1000) and 1.0341. However, if price trades at 1.0340 the analysis has to be changed.

Fundamentally, the Russian war continues to encourage EURUSD selling. US CPI at 7.9% on an annual basis is putting pressure on the Fed to hike rates. Which the market expects they will do by 0.25% tomorrow, March 16th. However, as the market is expecting this to happen and according to Bloomberg, is giving a 70% probability of US rates being at 1.73% by December. could higher US interest rates be already 'in the price.' Also, if/when the Russian war ends, hopefully very soon, will Russia and China want to be exposed so much to the US dollar? Which to an extent has been weaponised. It all points to watching 1.0341...