The forecast for EUR/USD and GBP/USD on May 17. The pound falls into the abyss. Theresa May will resign only after the completion

EUR/USD – 4H.

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As seen on the 4-hour chart, the EUR/USD pair made an attempt to grow to the Fibo level of 76.4%, which ended in failure half way to the designated target. The quotes of the pair returned to the retracement level of 100.0% (1.1177) and even completed the closure under it, however, this closure can be easily interpreted in the future as a rebound. In the coming hours, I recommend watching the pair. Yesterday, the news was again in favor of the US dollar, the construction segment showed very good dynamics in April, the number of applications for unemployment benefits also turned out to be less than expected. Today, it's not a fact that the US currency will receive additional support due to the news, although several important reports will be published today (inflation in the EU and US consumer confidence index). In any case, the three previous attempts to close below the Fibo level of 100.0% failed. It is possible and the fourth rebound from this level of retracement. As a result, the rebound will lead to a new attempt to reach the Fibo level of 76.4% (1.1241), and closing of the pair below the Fibo level of 100.0% will significantly increase the chances of continuing falling towards the next retracement level of 127.2% (1.1102). There are no emerging divergences on the current chart on May 17th.

The Fibo grid was built on extremums from March 7, 2019, and March 20, 2019.

Forecast for EUR/USD and trading recommendations:

The EUR/USD pair remains, in my opinion, in the movement within the side corridor between the levels of 76.4% and 100.0%. Thus, the next rebound from the Fibo level of 100.0% will allow buying a pair with the target of 1.1241. This is the nearest goal, but as yesterday's trading showed, it is also quite difficult to achieve in the current conditions. At the same time, the closing below the level of 1.1177 will allow selling the pair with the target at 1.1102.

GBP/USD – 4H.

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As seen on the 4-hour chart, the GBP/USD pair continues to fall in the direction of the retracement level of 38.2% (1.2765). The rebound of the pair from this level will allow traders to expect a reversal in favor of the British currency and some growth in the direction of the retracement level of 50.0% (1.2867). On May 17, a bullish divergence in the CCI indicator is brewing, the formation of which may coincide with the rebound from the Fibo level of 38.2%. In recent days, the pound has been falling non-stop, which indicates the strength of the "bearish mood". Thus, even if the rebound and divergence, without strong news, there is no need to count on a large pullback of the pound to the top.

The Fibo grid was built on extremums from September 20, 2018, and January 3, 2019.

GBP / USD – 1H.

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As seen on the hourly chart, the pair GBP/USD shows the hopeless position of the pound even better. The fall of the English currency is recoilless. At the moment, the quotes of the pair have come up against the retracement level of 127.2% (1.2782). There is also a bullish divergence in the CCI indicator. Thus, as in the 4-hour chart, the pair shows all the signs of a desire to start growth. Nevertheless, I once again warn you that with such a trend strength, a pullback up may be minimal. The pair closed below the Fibo level of 127.2% will increase the chances of a further fall in the direction of the next retracement level of 161.8% (1.2673). In the UK, they want to dismiss Premier Theresa May again. Both her party members and the opposition support this option. May's support among the population has declined significantly in recent years, which was well seen in the local elections. However, May still stands his ground and is not ready to resign before the Parliament accepts the Brexit deal.

The Fibo grid was built according to extremums from April 25, 2019, and May 3, 2019.

Forecast for GBP/USD and trading recommendations:

The GBP/USD pair on two charts have performed a fall to important Fibo levels and two divergences are brewing at once. Thus, the rebound from these levels will allow you to buy a pair with a target of 1.2865 and a stop loss order below the Fibo level of 127.2% (hourly chart). But I recommend cautious purchases or do without them, as the current fall is very strong. Closing the quotes below the Fibo level of 127.2% will make it possible to sell the pair with a target of 1.2673 and a stop loss order above the level of 127.2%.

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