Technical analysis for EURUSD for May 24, 2019

After an impressive 4 hour reversal candle pattern yesterday, EURUSD is now moving higher confirming our bullish expectations as we noted in our last analysis. We singled out the long bullish candlestick yesterday and we said that this was a reversal pattern. A follow through would be bullish for EURUSD.

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Red line - resistance trend line

Red rectangle - bullish reversal 4 hour candlestick pattern

EURUSD is trading above 1.12 today near the week highs. Having started the week on a weak note, yesterday's 4 hour candle inside the red rectangle was a clear sign of reversal. There are many chances that a major low is in for EURUSD. However in order to be sure, we will need price to break and stay above 1.1260. Resistance is found at 1.1230 at the upper channel boundary also shown by the red line in the chart above. Previous high at 1.1260 is also important resistance so clearing both of these levels will open the way for a much bigger bounce.

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Technical analysis for Gold for May 24, 2019

Gold price is trading near its weekly highs after challenging important support at the start of the week. Price initially broke below important support trend lines but the week is ending on a more bullish note than when it started. Price is approaching major resistance area of $1,290-$1,300 again.

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Black line- resistance trend line

Green rectangle - support area

Red line - major support trend line

Blue line - major resistance trend line

Gold price bounced once again from the green support area. Bulls manage to hold above $1,266 and price recaptured $1,280. Gold price is now challenging the $1,290-$1,300 resistance area. For more upside bulls will need to break this resistance and recapture and hold above $1,300. Failure to do so will bring price back to $1,270 and if $1,266 is broken we will most certainly see a move to $1,250-20. For now bulls are still alive but bears continue to hold the upper hand.

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Bitcoin analysis for May, 24.2019

BTC has been trading upwards. The price tested the level of $8.100. Anyway, it looks risky for buying since the key resistance line at the price of $8.233 is there.

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Yellow rectangle – swing high resistance

Red horizontal line – swing low support

White lines – Upward channel

BTC is trading inside of the upward channel. Anyway, strong resistance cluster at the price of $8.233 is there and buying looks risky at this stage. Our advice is to watch for potential break of the upward channel in order to confirm down movement. Stochastic oscillator is showing the bearish divergence, which is another sign of the weakness.

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May 24, 2019 : EUR/USD Intraday technical analysis and trade recommendations.

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On January 10th, the market initiated the depicted bearish channel around 1.1570.

Since then, the EURUSD pair has been moving within the depicted channel with slight bearish tendency.

Few weeks ago, a bullish Head and Shoulders reversal pattern was demonstrated around 1.1200.

This enhanced further bullish advancement towards 1.1300-1.1315 (supply zone) where significant bearish rejection was demonstrated on April 15.

Short-term outlook turned to become bearish towards 1.1235 (78.6% Fibonacci) then 1.1175 (100% Fibonacci level).

For Intraday traders, the price zone around 1.1235 (78.6% Fibonacci) stood as a temporary demand area which paused the ongoing bearish momentum for a while before bearish breakdown could be executed on April 23.

On May 13, another bullish pullback was executed towards the mentioned price zone (1.1230-1.1250) where the current bearish movement was initiated.

For the past few weeks, the EURUSD pair has been trapped above the next demand-zone (1.1175) until last Friday when a bearish breakdown below 1.1175 was temporarily achieved.

As expected, further bearish decline was expected towards 1.1115. This is where significant bullish recovery was demonstrated by the end of Yesterday's consolidations. This brought the pair back above 1.1175 (previous weekly low).

Currently, The EURUSD pair remains trapped between the depicted price zones (1.1175-1.1235) with recent bullish tendency until a definitive range-breakout occurs in either direction.

Trade recommendations :

Intraday traders can look for a counter-trend BUY entry upon the recent bullish breakout anywhere around the price level of 1.1175.

T/P level to be located around 1.1240. Stop loss should be placed below 1.1150.

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Analysis of Gold for May, 24.2019

Gold has been trading sideways at the price of $1.283.85. From our view, Gold did only consolidation before potential new wave up.

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Red horizontal line – swing high resistance

Orange rectangle- Resistance 2

White lines – bullish flag boundiries

Broken bull flag on the 1H time-frame, watch for potential buying opportunities. We found that after the mark up phase yesterday, today price action looks like a corrective down move before new wave up. Downward references are set at $1.280 and $1.278. Upward references are set at $1.288 and $1.298. Stochastic oscillator did flip for upside as well, which adds more for the upside.

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Who is stronger, the euro or the dollar?

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Brilliant campaigns of "bears" on EUR/USD ended in failure. The first sign of their weakness was their inability to anchor below the support level of $1.13. And it all started so well. Why the euro bounced up while the dollar was thrown off its pedestal. After all, in economic terms, the positions of currencies are almost equal – both countries are predicted to slow growth.

The American policy of protectionism is a serious blow to competitors, but at the same time, it goes to the States themselves. The recent series of introduced tariffs will cost US consumers $106 billion a year, the New York Federal Reserve Bank estimated.

The situation was aggravated by the disappointing statistics on the real estate market and business activity. Rates on 2-year US government securities deepened to a 15-month bottom, "ten-year" fell to 19-month lows, the yield curve went into the red zone, and the risks of lowering the Fed rate this year jumped to 78% from 68% earlier. In this situation, the dollar is difficult to stay afloat, not to mention the growth.

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As for the euro, the continued decline in purchasing managers' indices in the manufacturing sector of Germany and the eurozone, together with a serious fall in the business climate from the IFO, hit the quotes powerfully. The ECB added fuel to the fire. Financial officials predicted a long-term slowdown in eurozone GDP and low inflation expectations.

It is worth noting that, in a panic selling the euro, very few people noticed the published positive. Thus, PMI in the services sector, which accounts for 73% of the euroblock economy, is still stable. Business activity in France jumped to its highest level in six months. Another important point: the members of the European Central Bank believe that negative rates will negatively affect the financial results of the banking system. It is possible that the ECB will raise them and at the same time provide a generous LTRO package. Isn't it a bullish factor for EUR/USD?

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Indeed, economic growth in the eurozone may slow down in the second quarter, but America is far from "chocolate". According to estimates of the leading indicator from the Atlanta Fed, the US GDP growth rate in the period from April to June will be reduced to 1.2% from 3.2%. Quite perceptible. The slogan "America First!" and the accompanying policy seems to have the opposite effect, and Donald Trump cuts the branch on which he sits. Next year, voters are unlikely to be impressed by the slow development of the economy.

By the way, Trump, looking at the fall of the S&P 500, announced his intention to support local farmers affected by trade wars, and announced the amount. This year, it will be increased to $16 billion from $12 billion earlier. The owner of the White House also made it clear that the Chinese technology giant Huawei could become a bargaining chip in the protracted dispute between the United States and China. Yes, the company's activity threatens US national security, but the President is ready to withdraw sanctions for the sake of signing an agreement with China.

Now, the market is dominated by anti-risk sentiment. The American economy is causing concern this time. The fall of the S&P 500, as expected, increased the demand for protective assets – yen, franc, and gold.

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GBPUSD: Theresa May resigns, and the pound remains under pressure due to the risk of hard Brexit

Perhaps all the attention of traders today was focused on the news that British Prime Minister Theresa May announced her resignation. This decision was quite predictable, which did not lead to a significant change in the market situation, except for a small profit taking on the British pound in the area of large support levels.

Theresa May announced today that she will resign on June 7, and the struggle for leadership in the Conservative Party will begin on June 10. Until that time, until the election of a new leader, May will remain as head of the party.

The main reason why British Prime Minister Theresa May left her post was another unsuccessful attempt to enlist the support of Parliament regarding the agreement on the conditions for the country's withdrawal from the EU. It is likely that her post will get a supporter of tougher Brexit than expected developed May's agreement. However, the current situation has already been taken into account in the quotes of the GBPUSD pair, which has been declining over the past two weeks. According to experts, among the main favorites in the struggle for the Prime Minister's seat is former foreign Minister Boris Johnson, as well as former Brexit Secretary Dominique Raab. Let me remind you that these two candidates are supporters of a sharp break in relations with the EU, which increases the likelihood of a hard Brexit.

However, do not rush and sell the pound at current lows. It should be understood that even if the new Prime Minister takes the side of a tougher Brexit, a break in relations with the EU without announcement still seems unlikely, as this will not change the balance of power in Parliament. First of all, we are talking about the Conservative Party, in which quite a few people are waiting for a milder development of the situation. On the other hand, most likely, it will be possible to forget about the second referendum, which Theresa May recently emphasized in her agreement.

As for today's fundamental data, retail sales failed to provide strong support to the British pound. According to the report, in April of this year, compared with March, the volume of retail sales in the UK did not change. The data were much better than forecasts of economists, who expected a decline in sales by 0.3%.

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The report of the National Bureau of Statistics suggests that consumers will continue to support the economy of the country in 2019, which can offset the limited costs of companies in the face of uncertainty with Brexit. As for April last year, the volume of retail sales grew by%, 2%.

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GBP/USD analysis for May, 24.05.2019

GBP has been trading upwards. The price tested the level of 1.2117. Anyway, I found potential fake breakout of yesterday's high at 1.2684, which is sign that buying at this stage looks risky.

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Red horizontal line – swing low support

Red horizontal line 2- Swing low support 2

White lines – Bolinger bands

GBp/USD did try to push higher but we found that bearish divergence on the Stochastic oscillator, which is sign for potential downside. Key intraday resistance is set at the price of 1.2716. Downward references are set at 1.2647 and 1.2606. Our advice is to watch for potential selling opportunities. The first downward target is set at the price of 1.2647.

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