EUR/USD – 4H.
As seen on the 4-hour chart, the EUR/USD pair performed a reversal in favor of the European currency and closed above the correction level of 61.8% (1.1318), thus indicating the intention to continue growth in the direction of the correction level of 76.4% (1.1368). The last weeks in the forex market are definitely left behind euro currency, while traders do not favor the dollar. It seems that this is directly related to a possible reduction in the Fed’s rates, which was pressured in this matter by Donald Trump over the past year. According to Trump, Powell raises the key rate too quickly, which leads to problems with servicing the public debt and hinders export operations, as the dollar grows because of this. Whether Powell finally heeded the words of Trump, or he saw that with Trump it’s better to play on the same team, as it is a whole economy of the country, but his last speech was full of hints at a possible reduction of the key rate, “if necessary.” This factor may be key in the confrontation between the euro and the dollar in the coming months. But here it should be noted another fact, almost the same, the ECB also hinted that the rate can be reduced. And the ECB’s current rate level is 0.0%, unlike the Fed.
The Fibo grid is built on extremums from March 20, 2019, and May 23, 2019.
Forecast for EUR/USD and trading recommendations:
The EUR/USD pair performed a consolidation above the correction level of 61.8%. Thus, I recommend buying the euro today with the target at 1.1368, a protective order under the correction level of to 61.8%. I recommend selling the EUR/USD pair after closing the quotes below the correction level of 61.8% (1.1277) and a stop-loss order above 1.1318.
GBP/USD – 4H.
The GBP/USD pair performed a reversal in favor of the pound on June 11, after rebounding from the correction level of 76.4% (1.2661), and began the growth process in the direction of the Fibo level of 61.8% (1.2796). Bears have shown their unwillingness to return to the market right now. The Fed and Donald Trump are now playing against the US dollar, but Brexit is still playing against the pound sterling. And there is no news on this topic, let alone good news. Traders still feel a high degree of risk when buying English currency and avoid such transactions. Yesterday in the UK, there were several reports on wages and unemployment. They turned out to be quite good, which probably caused a small demand for the pound. However, Brexit cannot get out of the “fog”: there is still no visible path that the country follows in order to leave the European Union. Yesterday, at the initiative of the Labor Party, a proposal to block the hard version of Brexit was submitted for discussion. In other words, even if the new Prime Minister wants to leave the EU under this scenario, the Parliament is already showing its unwillingness to support this decision.
The Fibo grid is built on the extremes of January 3, 2019, and March 13, 2019.
GBP/USD – 1H.
As seen on the hourly chart, the GBP/USD has also completed the rebound from the Fibonacci level of 161.8% (1.26730) and began the process of growth towards the correctional level of 127.2% (1.2781). There are no emerging divergences on any of the charts. Despite the fact that the bulls are now more active, the bears are ready at any time to start again to put pressure on the pound sterling. This requires only a new fundamental push. While the situation in the UK is relatively stable, there are no new political outbursts, there is no news on government reshuffles, and economic data are even sometimes positive. It keeps the bears in the shadows.
The Fibo grid is built on the extremes of April 25, 2019, and May 3, 2019.
Forecast for GBP/USD and trading recommendations:
The GBP/USD pair performed the rebound from two important levels of correction. I recommend to leave the pair’s purchases open for yesterday’s signal with the target at 1.2781, with a stop-loss order below 1.2673. I recommend selling a pair when closing quotes below the Fibo level of 76.4% (4-hour chart) with the target of 1.2554 and a protective order above the level of 1.2673.
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