EUR/USD – 4H.
As seen on the 4-hour chart, the pair EUR/USD has completed the closing under the Fibo level of 100.0% (1.1177). As a result, the process of falling quotations continues on Monday, May 20, in the direction of the next retracement level of 127.2% (1.1102). Friday's trading was again against the euro. Among the news of this day, inflation in the European Union can be identified, which fully met the expectations of traders (1.7%). The base consumer price index rose by 1.3%. However, this news did not seem too important to the markets, and the consumer confidence index in the US – important news. The University of Michigan figure rose from 97.5 to 102.4, and the dollar continued to grow with pleasure. There are no emerging divergences in the EUR/USD pair today. The consolidation of quotations above the Fibo level of 100.0% will allow traders to expect a reversal in favor of the EU currency and some growth in the direction of the retracement level of 76.4% (1.1241). Today, we pay attention to the German producer price index for April, and later on the national activity index of the Federal Reserve Bank of Chicago. Reports are not the first degree of importance but can support the US dollar.
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 still showed a desire to continue the process of falling towards the level of 1.1102. Thus, I recommend selling the euro for this purpose, with a protective order above the Fibo level of 100.0%. I recommend buying the pair after closing above the retracement level of 100.0% with a view to a Fibo level of 1.1241.
GBP/USD – 4H.
As seen on the 4-hour chart, the GBP/USD pair continues to fall in the direction of the retracement level of 23.6% (1.2639), as it was closed below the Fibo level of 38.2% (1.2765). At about 38.2%, the pair did not even think about rebounding and rebounding upwards in favor of the British pound. This shows the absolute weakness of the pound on May 20. The Forex market continues to sell the pound, seeing no reason to keep it in its portfolios. Only disappointing news continues to come from the UK, reflecting the government's inability to negotiate with one another and complete the Brexit process three years after it began. There is still a bullish divergence in the CCI indicator, which allows us to count on some growth of the pair. The rebound of the euro from the Fibo level of 23.6% will similarly work in favor of the beginning of the growth of quotations.
The Fibo grid is built on extremums from September 20, 2018, and January 3, 2019.
GBP/USD – 1H.
As seen on the hourly chart, the pair GBP/USD shows a hopeless fall of the pound even better. After closing the quotes below the Fibo level of 127.2% (1.2782), the target for the fall – 161.8% (1.2673). In addition to the emerging bullish divergence of the CCI indicator, we also have a bearish divergence of the same indicator. It seems that bearish divergence has more power and is able to help traders make a decision about new sales of the pound and purchases of the US dollar. In the evening, there will be a speech in the British Parliament Ben Broadbent – members of the Monetary Committee. Perhaps the market will learn any new information regarding monetary policy in the most severe conditions of Brexit. Theresa May, fiercely unwilling to resign voluntarily, said in an interview that she was preparing a new version of the deal with the EU, an improved one.
The Fibo grid was built according to extremums from April 25, 2019, and May 3, 2019.
Forecast for GBP/USD and trading recommendations:
The pair GBP/USD continues to fall, so I recommend selling the pair with the target at 1.2673. The formation of a bearish divergence will only increase the chances of a further fall in the pound. I recommend buying the pair in very small volumes with the price quotations from the Fibo level of 161.8% (hourly chart) with the target of 1.2782 and a protective order below the level of 161.8%. It is best to abandon the purchase of the pound sterling.