EUR / USD pair
Trading the EUR/USD pair ended on Thursday, May 23, with an increase of 30 basis points, which somewhat confused the cards at the hands of traders. The wave pattern implied a further fall in the euro but now an alternative scenario is emerging, which implies the completion of the construction of the downward trend that takes its start on March 20. The unsuccessful attempt to break through the minimum of the supposed wave 1, 3, 3 speaks precisely in favor of this and shows the unavailability of the pair to fall. All of these changes are associated with weak American statistics. Business activity in both areas of production and services unexpectedly turned out to be much worse than forecast. Meanwhile, markets were disappointed with such figures and began to get rid of the dollar. Now, the tool can attempt to break through the maximum of wave 2, 3, and 3.
Sales targets:
1.1097 - 161.8% Fibonacci
1.1045 - 200.0% Fibonacci
Purchase targets:
1.1324 - 0.0% Fibonacci
General conclusions and trading recommendations:
The euro/dollar is still in the process of building a downtrend trend. But after yesterday's withdrawal of quotes from the lows reached, I recommend waiting for the signal down from the MACD and again selling the euro with targets at 1.1097 and 1.1045, which corresponds to 161.8% and 200.0% in Fibonacci. I recommend to place a restrictive order above the level of 100.0% Fibonacci.
GBP / USD pair
On May 23, the GB /USD pair also gained 30 basis points. However in consideration of the average market activity for the pair, the reaction is completely unequal to the reaction for the euro/dollar pair. There is no reason to clarify the current wave marking on the instrument now, even if the MACD indicator gave an upward signal. This also warns at least a rollback. Nevertheless, given the not so rosy news background from the UK, there is every reason to wait for the resumption of the fall of the sterling pound. Just a few hours ago, the current Prime Minister of Great Britain, Theresa May, announced that she was retiring on June 7. Markets did not respond to this statement, although one could expect a wave of optimism since the new prime minister is more likely to bring Brexit to a logical end. May lost the support of both the public and the parliament early in the year.
Sales targets:
1.2554 - 200.0% Fibonacci
1.2360 - 261.8% Fibonacci
Purchase targets:
1.3175 - 0.0% Fibonacci
General conclusions and trading recommendations:
The wave pattern of the pound/dollar instrument implies a continuation of the instrument decline within the wave c. Thus, now I still recommend selling pounds sterling with targets located near the estimated levels of 1.2554 and 1.2360, which corresponds to 200.0% and 261.8% Fibonacci. With one clarification, I recommend waiting for the signal MACD for new sales.
The material has been provided by InstaForex Company - www.instaforex.com