empty
 
 
19.05.2020 10:42 AM
Analysis and forecast for EUR/USD on May 19, 2020

Greetings, dear colleagues!

Yesterday, the currency market noted an increase in risk sentiment associated with the easing of restrictions from the negative consequences of COVID-19. It is also necessary to note the disappointing forecasts of the Chairman of the US Federal Reserve System (FRS) Jerome Powell. According to the head of the Federal Reserve, in the 2nd quarter of 2020, GDP may fall short of 20 to 30 percent, and the unemployment rate risks exceeding 20%. At the same time, Powell believes that the downturn will be short-lived and the American economy will cope with it.

Regarding COVID-19, it is worth recalling that the United States continues to be the undisputed leader in the number of infected people. The daily increase in infected people in the United States ranges around 19,000. Despite such extremely negative figures, Donald Trump believes that the situation is improving. We are not used to such statements from the 45th President of the United States. Let me remind you that at a time when the vast majority of countries are more committed to supporting the World Health Organization (who), the United States has refused to pay contributions to this organization and accuses WHO of colluding with China in allegedly hiding the true information about the danger of a new type of coronavirus infection.

Meanwhile, French President Emmanuel Macron and German Chancellor Angela Merkel are much closer to an agreement on creating a bailout fund for Europe's economy. Those countries and economic sectors that have been most affected by COVID-19 are primarily targeted for financial assistance. Let me remind you that the size of this fund is expected to be 500 billion euros.

Daily

This image is no longer relevant

If we go to the technical picture of the EUR/USD currency pair, all of the above events had a negative impact on the US dollar and supported the single European currency. As a result, the pair showed fairly significant growth, strengthening by 0.9%.

During the rise, the Tenkan and Kijun lines of the Ichimoku indicator were passed and the resistance of sellers was broken at 1.0895, and trading closed at 1.0912, which in itself is extremely important for the euro bulls, as it opens the way for them to further goals.

If yesterday's highs are updated at 1.0926, the next target for the increase will be 89 EMA, which is held at 1.0939. I consider the marks of 1.0965 and 1.1000 to be more distant benchmarks for possible growth.

H4

This image is no longer relevant

I built a descending channel with parameters on this timeframe: 1.1146-1.1017 (resistance line) and 1.0768 (support line). At the end of the review, the pair is ready to continue yesterday's rise and is growing moderately.

The resistance line of this channel runs in the area of 1.0950-1.0965. If there are 4-hour bearish candles here, this will be a signal to open sales. If the price goes up from the channel and fixes above its resistance line, it is worth considering buying on the pullback to the broken line. Today, this is the main trading recommendation.

I note that yesterday's sales ideas below 1.0900 were not confirmed, so it is better to see the corresponding signals before entering the market. Market sentiment changes frequently and sometimes very rapidly.

Good luck with trading!

Ivan Aleksandrov,
Analytical expert of InstaForex
© 2007-2024
Earn on cryptocurrency rate changes with InstaForex
Download MetaTrader 4 and open your first trade
  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    JOIN CONTEST
  • Chancy Deposit
    Deposit your account with $3,000 and get $8000 more!
    In March we raffle $8000 within the Chancy Deposit campaign!
    Get a chance to win by depositing $3,000 to a trading account. Having fulfilled this condition, you become a campaign participant.
    JOIN CONTEST
  • Trade Wise, Win Device
    Top up your account with at least $500, sign up for the contest, and get a chance to win mobile devices.
    JOIN CONTEST
  • 100% Bonus
    Your unique opportunity to get a 100% bonus on your deposit
    GET BONUS
  • 55% Bonus
    Apply for a 55% bonus on your every deposit
    GET BONUS
  • 30% Bonus
    Receive a 30% bonus every time you top up your account
    GET BONUS

Recommended Stories

Can't speak right now?
Ask your question in the chat.
Widget callback