2022-05-16 09:39:26
EUR/USD WEEKLY REVIEW 16.05-20.05.2022
At the time of publication of the review, the EUR/USD currency pair is 1.04070.
Market the day before
Over the past month and a half, it has lost more than 7.5% in price, and the sixth package of sanctions, which has been adjusted for the second week before the main table of contents, is still being finalized. Since many countries completely disagree with the embargo on Russian oil because of their dependence on it.
EUR has already updated all local lows and now there are practically no sellers who would like to sell it, next week we expect the accumulation of positions from buyers and a change in trend with the main hike already to increase.
We expect
During this trading week, the euro lost more than 250 pips in price and at the same time worked out the farthest and last target level at around 1.04000.
Now the market is at the very bottom, where it once began its upward march. The most recent low is 2017, when Trump was elected. We are back to those levels. The price was lower only in 2001.
Since the price is oversold, the volume of sellers does not increase.
On the weekly timeframe, the market will form a classic Double Bottom reversal pattern and subsequently will tend to rise towards the takes at 1.06200, 1.08550, 1.12200.
After the daily green trend and the weekly global trend change, we can count on upside signals.
At the moment, we do not see any reason for a further downtrend, except for some bad news background.
We expect the nearest resistance level to be broken and then we look forward to growth.
Thesis:
- Formation of the classic double bottom reversal pattern;
- Hike to the teiks at 1.06200, 1.08550, 1.12200;
Economic calendar:
Tuesday
20:00 ECB President Lagarde to deliver a speech
Wednesday
12:00 Consumer Price Index (CPI) (YoY) (Apr) 7.5% 7.5%
European stocks edged higher on Friday as investors searched for bargains as equities were hit by fears of soaring inflation and monetary tightening, which would severely curb the region's growth, especially given the fallout from the Ukraine conflict.
However, the major European indexes have shown negative dynamics for the fifth week in a row, which is the longest streak since February.
Over the weekend, G7 foreign ministers will be joined by NATO officials to discuss potential bids from Finland and Sweden to join the military alliance.
Moscow on Thursday threatened to retaliate against Finland if it continues with its plans to join NATO.
The US central bank raised its benchmark interest rate by 50 basis points last week, the biggest increase in 22 years, and is expected to continue to tighten monetary policy decisively in the coming months.
"If the economy performs roughly as expected, it would be appropriate for an additional 50 basis point rate hike to be made in the next two meetings," Powell said in an interview with public radio program Marketplace on Thursday.
However, he added that the Fed is "not actively considering" a larger 75 basis point increase, prompting some traders to roll back their long dollar positions.
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