2022-05-09 07:51:58
EUR/USD WEEKLY REVIEW 09.05-13.05.2022
At the time of publication of the review, the EUR/USD currency pair is 1.05900.
Market the day before
The EUR/USD rebounded after falling below 1.0500 earlier on Friday. However, in the current risk-averse market environment, the pair is likely to find it difficult to make a convincing recovery.
On the monthly time frame, the euro has broken through the support trend line, and has worked out the nearest targets.
On Wednesday, the euro rushed to rise and rose by 130 points, while the dollar fell.
All volatility worked out in 5-7 days.
We expect
After Thursday's takeoff, the currency pair pulled back and formed a strong global support level.
We expect that USD will go down on the news, and EUR will grow.
On H4, the market tested the nearest support level, the currency pair was not allowed to rush down.
We expect the body to break through the nearest resistance level at H4 at 1.06420 and then we expect growth.
The “Triangle” has broken down and if there is a break through of resistance, then a “Double Bottom” will form.
After breaking through the resistance, the euro will go up and you can trade to the level of 1.07280.
Due to the contradiction in the signals that the indicators give, as well as the decrease in volatility, the most correct decision now is to focus on the nearest significant levels of support and resistance.
The 'bullish' scenario of developments will be 'activated' in case of a breakdown of the resistance level 1.0550, which may open the way to the levels 1.0615, 1.0649 and 1.0678.
The 'bearish' scenario will begin to materialize in case of a breakdown of the strong support level of 1.0492, after which the quotes may fall to the levels of 1.0410, 1.0390 and 1.03395.
Thesis:
- USD will go down, and EUR will grow;
- Breaking through the nearest resistance level at 1.06420;
- The euro will start a hike to increase to around 1.07280.
Economic calendar:
Tuesday
12:00 ZEW economic sentiment index in Germany (May) 42.5 41.0
The indicator does not change much, so we do not expect a strong reaction.
The UK economy could slide into recession in 2022 with rising energy prices pushing inflation above 10%.
The warning reminded investors that the Fed can afford to continue to tighten policy at a more aggressive pace than the Bank of England and the European Central Bank (ECB), which will have to deal with a slowdown in activity amid the ongoing Russia-Ukraine conflict.
The US economic calendar will feature the April employment report. Non-agricultural employment is expected to rise by 391,000 in April after increasing by 431,000 in March. Investors, however, are likely to pay close attention to wage inflation data. Average hourly wages are projected to rise by 5.5% year on year. Stronger-than-expected data could provide additional momentum for the dollar ahead of the weekend and vice versa.
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