22.05.201910:04 Forex Analysis & Reviews: Wave analysis of EUR / USD and GBP / USD for May 22. UK prepares for change of prime minister

EUR / USD

On Tuesday, May 21, trading on the currency market for the EUR / USD pair ended with a decrease of several base points, although during the day market activity was not weak and the instrument made a good movement up and then down. However, in general, the wave pattern has not changed at all, and it cannot even be supplemented now. This is for the better, as it convinces us of the correctness of the current wave marking, which assumes the continuation of the construction of a downward trend segment. The unsuccessful attempt to break through the level of 100.0% according to Fibonacci indirectly indicates the readiness of the market for new sales of the pair. Thus, the bears continue to move the pair down, based on the absence of a positive news background for the euro. Indeed, how can the demand for the euro appear if no good news comes from the European Union? Tonight, Mario Draghi and the markets will scrupulously search in his words for hints on the parameters of the new LTRO program, which will re-stimulate the EU economy. Any weakness in Draghi's rhetoric will help with building wave 3, 3, 3.

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 is still in the process of building a downward trend. Now, I recommend the bears to remain on the instrument with targets at 1.1097 and 1.1045, which corresponds to 161.8% and 200.0% Fibonacci. I recommend transferring a restrictive order to the level of 100.0% Fibonacci.

GBP / USD

On May 21, the GBP / USD pair lost more than 100 bp from the high of the day, and Theresa May made a "smart" proposal to the parliament. According to her, she is ready to consider the possibility of holding a second referendum if the parliament supports her agreement on Brexit. Many parliamentarians are skeptical about such a proposal, and there is every reason to assume that they will not meet the premier. Moreover, there is reason to expect that the fourth vote on the Brexit agreement will fail, because nothing in the agreement itself changes. Theresa May is likely to retire this summer, regardless of the outcome of the fourth vote. Her successor might be Boris Johnson who can initiate new negotiations with the European Union. And the pound sterling continues to fall, since it has no other way now. Now, the dollar does not even need the news background from America for it to continue its growth. Now, the Forex market is definitely in a bearish mood.

Sales targets:

1.2675 - 161.8% Fibonacci

1.2554 - 200.0% Fibonacci

Purchase goals:

1.3175 - 0.0% Fibonacci

General conclusions and trading recommendations:

The wave pattern of the pound / dollar instrument implies a continuation of the instrument decline within the wave c. Thus, now, I still recommend selling the pound with targets located near the calculated marks of 1.2675 and 1.2554, which corresponds to 161.8% and 200.0% in Fibonacci. An unsuccessful attempt to break through the 161.8% mark may lead to a departure of quotes from the lows reached.