EUR/USD
Monday ended for the EUR/USD pair with a decrease of 20 bp. If the current wave layout is correct, then the 5th wave combination of the upward waves is already constructed. Therefore, from the current position, we can expect a decrease in the instrument within the correction set of waves. At the same time, a successful attempt to break the maximum of the expected wave 5 will lead to a complication of the internal wave structure of the trend area, which begins on May 23. Recently, the markets are increasingly discussing the slowdown of the US economy. For some, this is of great concern, as trade wars will not pass unnoticed by the US economy. As official reports show recently, the US economy is really slowing down. Jerome Powell admits a rate cut in the near future, and various economic publications believe that the probability of a rate cut in September is 80-90%. Donald Trump has long been putting pressure on Powell, believing that the Fed is too fast and often tightens monetary policy. Perhaps now Powell will hear the US President and we are waiting for a rollback on the rates down.
Purchasing goals:
1.1367 – 76.4% Fibonacci
1.1447 – 100.0% Fibonacci
Sales targets:
1.1106 – 0.0% Fibonacci
General conclusions and trading recommendations:
The euro/dollar pair is expected to be at the stage of building the first wave of a new trend segment. However, the construction of a correction set of waves can begin today or tomorrow. Based on this, I recommend waiting for the beginning of the construction of wave 2, and upon its completion from the lows between 11 and 12 figures, buy a pair of euro/dollar with goals located above the 14 figure.
GBP/USD
Everything that is said in the section about the EUR/USD pair has a weak impact on the pound/dollar pair. The pound sterling remains the main factor for Brexit. Plus, the UK cannot please now strong statistics, which is not surprising. Thus, even fears for a possible weakening of the Fed's monetary policy do not particularly help the pound. Yesterday, the pound ended with a loss of about 50 basis points. At the moment, the chances of building three waves up remain. At least three waves. Then, upon completion of the correction section of the trend, it will be possible to assume the construction of a new 5-wave section down. However, the news background, which remains, though not entirely in favor of the dollar, causes the markets only one desire – to sell the pound. Perhaps in the near future, the situation will change, but so far it is very difficult to count on it. In any case, I recommend waiting for a successful attempt to break the minimum of the expected wave C to confirm the readiness of the pair to continue building a downward trend.
Sales targets:
1,2554 – 200.0% Fibonacci
1.2360 – 261.8% Fibonacci
Purchasing goals:
1.3175 – 0.0% Fibonacci
General conclusions and trading recommendations:
The wave pattern of the pound/dollar instrument suggests the resumption of the instrument's decline within the expected wave C or a new, fifth wave. Thus, now I recommend waiting for the breakthrough of the level of 200.0% and sell the pound with targets located near the calculated marks of 1.2360 and 1.2176, which corresponds to 261.8% and 323.6% of Fibonacci. Purchases, from my point of view, are now associated with increased risks.
