Today is the last trading day of the month, and volatility is poised to increase as we head into the American session. Throughout the month, the ដុល្លារអាមេរិក strengthened as a result of renewed inflation fears.
ដូចនេះ អឺរ៉ូ / ដុល្លារអាមេរិក exchange rate dropped about five big figures (i.e., five hundred pips) from above 1.10 to around 1.05.
But the move lower looks corrective, and EUR/USD bulls might have a case for another attempt at the 1.10 area.
An intervening x-wave points to more upside
The EUR/USD finished an impulsive wave with the latest move above 1.10. On its way up, the market ended the c-wave of an elongated flat pattern just ahead of an intervening x-wave.
X-waves are corrective structures, and very often, the market forms triangular patterns when a connecting wave appears. In this case, it looks like a falling wedge pattern that is about to end.
Bulls may want to wait for the price action to break above 1.07 before going long with a stop-loss at the recent lows in the 1.05 area and with a take-profit that exceeds twice the risk. The x-wave should be part of a triple combination pattern, and the new leg higher should easily exceed the previous highs.
If the EUR/USD gets back above 1.10, a risk-on movement has already started. As such, it means that the US dollar’s strength seen in February is about to end, and stocks may have room to rally in March.
Summing up, the technical picture points to a reversal in the EUR/USD exchange rate. If that is the case, look for risk-on to dominate financial markets in the weeks ahead.
Source: https://invezz.com/news/2023/02/28/eur-usd-price-forecast-ahead-of-the-end-of-the-month-flows/