EUR/USD
On Friday, May 31, the EUR/USD currency pair ended with an increase of 35 basis points. Thus, the current wave marking once again threatens to transform into a more complex one. Already, it is possible to build several options for wave marking, and each will assume any of its developments. For example, one of the options involves the construction of a new upward trend segment from the current position, and at least from May 23 considers it as the final wave of the long-term downward trend segment. However, what will happen if tomorrow, for example, the Fed will announce a new rate increase? Or will US GDP begin to slow down seriously? Or the ECB will announce its readiness to reduce its rate even more? That's right, traders will rush to sell the euro/dollar pair again, which will lead to the continuation of the construction of the downward section. Thus, I recommend considering the highs of May 27 and June 3 near the Fibonacci levels of 76.4% and 100.0% as reference. Successful attempts to break these marks will mean the readiness of the pair to build at least an upward wave. Otherwise, we will still see new sales in the instrument market.
Sales targets:
1.1097 – 161.8% Fibonacci
1.1045 – 200.0% Fibonacci
Purchase goals:
1.1324 – 0.0% Fibonacci
General conclusions and trading recommendations:
The euro/dollar pair remains at the stage of building a downward trend. The MACD indicator gave a signal up, so I recommend to resume sales of the euro with the targets at 1.1097 and 1.1045, which corresponds to 161.8% and 200.0% of Fibonacci, after a rollback up and receiving a signal "down". I recommend placing a restrictive order above the Fibonacci level of 76.4%.
GBP/USD
On May 31, the GBP/USD pair gained about 20 base points, and the wave pattern can also be interpreted in different ways. For example, a section of the trend between May 3 and May 31 can be considered as a 5-wave with a very small wave 2. If so, the supposed wave C is complete. If this is so, then we are waiting for the construction of at least a three-wave upward structure. But what will happen if tomorrow it turns out that the UK is waiting for Brexit without agreements, which will almost certainly hit the economy? Or if the new Prime Minister is just as unable to solve the Brexit problem as Theresa May? This will cause new sales of the pound/dollar pair and, in particular, the pound sterling, which will complicate the segment of the trend starting on March 13. Thus, for new sales of the pair, we are waiting for a breakthrough of the Fibonacci level of 200.0%.
Sales targets:
1.2554 – 200.0% Fibonacci
1.2360 – 261.8% Fibonacci
Purchase goals:
1.3175 – 0.0% Fibonacci
General conclusions and trading recommendations:
The wave pattern of the pound/dollar implies a further decline of the instrument in the framework of the proposed wave C. Thus, now I recommend to wait for the breakout level to 200.0%, and selling the pound with targets located near the calculated levels of 1.2360 and 1.2176, which corresponds to 261.8% and 323.6% of Fibonacci. An unsuccessful attempt of breaking the level of 200.0% led to the departure of quotes from lows reached.
