Hot forecast for EUR/USD on May 21, 2021

Due to the fact that the number of applications for unemployment benefits in the United States did not decrease, but increased, the single European currency was able to return to the values at which it was before the publication of the text of the minutes of the meeting of the Board of the Federal Open Market Commission. It's all about repeated requests, the number of which increased by 111 thousand, while a decrease by 40 thousand was expected. In this situation, a decrease in the number of initial requests by 34 thousand, with a forecast of 27 thousand, no longer matters. It turns out that the total number of applications for unemployment benefits, instead of decreasing by 67 thousand, increased by 77 thousand. In general, it is difficult to speak of a further recovery of the labor market. And apparently, this process has not just slowed down, but there are also risks of worsening the situation. This is what caused the dollar to weaken.

Repeated Unemployment Insurance Claims (United States):

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Today, the single European currency may build on its success thanks to preliminary data on PMIs. And while the manufacturing index is set to decline from 62.9 to 62.2, the service sector is likely to rise from 50.5 to 52.6. As a result, the composite PMI should rise from 53.8 to 54.5.

Composite PMI (Europe):

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At the same time, the position of the dollar will be further aggravated by American business activity indices. Apparently, the preliminary estimate will show a decline in the manufacturing index from 60.5 to 59.8, and in the service sector from 64.7 to 64.0. All this will lead to a reduction in the composite PMI from 63.5 to 63.0. In general, the dollar has little chance of growth today.

Composite PMI (United States):

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During the previous trading day, the EUR/USD currency pair closed the horizontal amplitude 1.2165 / 1.2185 with a breakdown of its upper border, which resulted in an increase in the volume of long positions. Market dynamics continues to show signs of accelerating volatility, which is confirmed by the structure of price candles, as well as the growth of speculative transactions in the market.

If we proceed from the current location of the quotes, we will see the return of the euro to the area of variable resistance at 1.2250.

In this situation, it can be assumed that holding the price above the 1.2250 coordinate may well lead to a subsequent increase in the volume of long positions, which will lead to the price convergence with the local maximum of the medium-term trend - 1.2349.

From the point of view of a comprehensive indicator analysis, it can be seen that the indicators of technical instruments are again signaling to buy, due to the resumption of the upward cycle.

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The material has been provided by InstaForex Company - www.instaforex.com

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