By Dmitriy Gurkovskiy, Chief Analyst at RoboForex
EURUSD is quite calm early in the week, but the key events are ahead.
One of this week’s highlights will the meeting held by the US Federal Reserve at the beginning of May. Near-term tone of many currencies and indices will significantly depend on what the regulator is going to say and the way it is going to say it.
Highly likely, the Fed will keep the rate intact to continue the break in rate hikes it took earlier, no one has any doubts about it. However, what happens next may be interesting: the regulator may announce a new tool to keep its monetary policy and rates “under harsh conditions”. As a result, the major currency pair is expected to be become volatile.
In addition to that, the US-China trade talks are scheduled to continue. This story has been taking too much time already and is very unlikely to end soon: a round of talks is replaced by another one and so on. On one hand, investors like it, but on the other hand, it can’t last forever. No one knows exactly what issues became cumbersome for Washington and Beijing, that’s why there are plenty of risks surrounding the deal.
As we can see in the H4 chart, EURUSD is trading downwards; it has broken the psychologically-crucial support level at 1.1200, which is the “neckline” of Head & Shoulders reversal pattern. Moreover, the price has reached the target of this wave at 1.1111 and rebounded from it. Right now, the instrument is being corrected upwards to reach 1.1185. After completing the correction, the pair start a new decline with the target at 1.1050, which is confirmed by Stochastic Oscillator’s movement inside the “oversold zone”.
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In the H1 chart, the pair is being corrected towards 1.1185. After that, the instrument may resume trading inside the downtrend to reach 1.1050, which is technically confirmed by MACD Oscillator. So far, this signal line is moving upwards.
Disclaimer
Any predictions contained herein are based on the authors’ particular opinion. This analysis shall not be treated as trading advice. RoboForex shall not be held liable for the results of the trades arising from relying upon trading recommendations and reviews contained herein.
