EUR/USD -15/4/2023-

Here's a short term analysis on the pair
• Labelled the March-April 3 waves of rally as 1,2 and 3 respectively
I am going to discuss the market's behavior and yesterday's sudden fall despite bad figures for the U.S
• Prices never keep going in one direction as a straight line. They rather retrace because of traders taking profit and Stop Losses being hit etc.. And whenever there is a correction, long term traders rather wait for better prices to re-enter again. This is how trends are formed, reflected by higher highs higher lows in an uptrend and vice versa for the downtrend.
• Wave 1: Euro rallied from 1.0520 to 1.0920, a massive 400 pip move which normally is followed by a retracement. Unsurprisingly, that is what happened next; market retraced back to the 50% Fibonacci level.
• Wave 2: Rally from 1.07 to 1.0970, almost a 300 pip move was also followed by a correction to the 50% level.
• And now we are in the 3rd wave: Rally from 1.0830 to 1.1070, a 200+ pip move. Yesterday was the first red candle this week following a 3 day sharp rally. Prices yesterday dropped to the 38.2% Fibonacci level and went back up again to close above it.

What is next?
• If the same scenario were to repeat itself, we might see a sharper decline to the 50% level at 1.0950 before making a new high.

Why?
Because in my personal opinion, the broader trend is up and FED-ECB policy are converging more and more. Plus, interest rates differential is tightening which will favor the Euro. The US Dollar has been rallying for almost 2 years, benefiting from the gap in policies between the ECB and the FED. Since that factor is changing, I think the bull cycle for the Dollar has ended, for now.