You are here: Home > articles > Forex > Analysis of EUR/USD on May 29th. Biden and McCarthy reached an agreement, and demand for the dollar is rising again
Analysis of EUR/USD on May 29th. Biden and McCarthy reached an agreement, and demand for the dollar is rising again
May 29, 2023 4:22 pmVideo
Latest News
- Analysis of GBP/USD on April 26th. The pound trades on Friday without changes April 26, 2024
- USD/JPY: Simple trading tips for novice traders on April 26th (US session) April 26, 2024
- GBP/USD: Simple trading tips for novice traders on April 26th (US session) April 26, 2024
- EUR/USD: Simple trading tips for novice traders on April 26th (US session) April 26, 2024
- GBP/USD: trading plan for the US session on April 26th (analysis of morning deals). The pound attempted, but it didn’t go April 26, 2024
- EUR/USD: trading plan for the US session on April 26th (analysis of morning deals). The euro continues to rise April 26, 2024
- Trading Signals for GOLD (XAU/USD) for April 26-29, 2024: buy above $2,324 and sell below $2,352 (21 SMA – 6/8 Murray) April 26, 2024
- Technical Analysis – AUDUSD set to complete best week of the year April 26, 2024
- Will Apple finally drop its AI hint? – Stock Markets April 26, 2024
- Bitcoin slips as markets pare back Fed rate cuts – Crypto News April 26, 2024
- EUR/USD. April 26th. Bulls continue to advance after the GDP report April 26, 2024
- Can Chinese PMIs solidify the economy’s recovery prospects? – Preview April 26, 2024
- Weekly Forex Outlook: 26/04/2024 – Hawkish risk as Fed and NFP on tap, Eurozone data eyed too April 26, 2024
- XM’s Lombok Collaboration: Brightening Futures April 26, 2024
- Week Ahead – Hawkish risk as Fed and NFP on tap, Eurozone data eyed too April 26, 2024
- Market Comment – Yen keeps sinking after Bank of Japan decision April 26, 2024
- Fed faces dilemma amid sticky inflation and slowing economy – Preview April 26, 2024
- USD/JPY: trading tips for beginners for European session on April 26 April 26, 2024
- GBP/USD: trading tips for beginners for European session on April 26 April 26, 2024
- EUR/USD: trading tips for beginners for European session on April 26 April 26, 2024
The wave labeling of the 4-hour chart for the euro/dollar pair remains non-standard and has not changed in recent weeks. The quotes continue to move away from the previously reached highs, so the three-wave upward structure can be considered complete. The entire ascending trend segment could take on a five-wave corrective form, but at the moment, I expect the formation of a downward trend segment, which is likely also to have a three-wave structure. Recently, I have consistently mentioned that I expect the pair to be near the 5th figure, from where the rise of the European currency began.
The upper point of the last trend segment was only a few dozen points higher than the highest point of the previous upward segment. Since December of last year, the pair’s movement can be considered horizontal, and this type of movement will continue. Over the past 2.5 months, demand for the euro has been consistently increasing, but I have repeatedly pointed out that the news background for the euro is not strong enough to justify such confident price growth. However, it is now becoming clear: a convincing ascending wave set had to be completed to begin forming a descending wave, which we are currently observing.
One less problem
The exchange rate of the euro/dollar pair decreased by 10 basis points on Monday, and the amplitude was minimal. This market passivity can be explained by the fact that today is Memorial Day in the United States, with all major platforms closed and most traders away from the market. The news background today is not just weak; it is absent. There is absolutely nothing: no reports, speeches, or other data. However, over the weekend, it became known that representatives of the Republican and Democratic parties had reached an agreement on raising the US debt ceiling. This news did not stir the markets; we may see the real reaction tomorrow. But today, demand for the US currency continues to rise at the same low pace as it has been for the past few weeks.
What does the resolution of the government debt problem mean? Nothing special. First, few people believed that Republicans and Democrats would allow a default, even a technical one. Second, the US currency has only been rising over the past three weeks, so the market was not concerned about a possible default. Third, when the dispute resolution became known, market activity did not increase, and the direction of the pair’s movement did not change. Based on this, we should still rely on wave analysis. It allows for more quotes soon, as it is time to build a corrective wave. The quote increase could start at any moment since we do not yet know the length of the first wave. However, we can rely on Fibonacci levels. For example, an unsuccessful attempt to break through the 23.6% level may indicate the market’s readiness to build an upward wave.
Overall conclusions:
Based on the analysis, I concluded that the formation of the upward trend segment is completed. Therefore, it is advisable to recommend selling now, as the pair has significant room for decline. The targets around 1.0500-1.0600 are still achievable. With these targets in mind, I advise selling the pair. Caution around the 1.0680 level should be exercised, as a pullback from the achieved lows is possible.
On a larger wave scale, the wave labeling of the upward trend segment has taken on an extended form but is likely completed. We have seen five upward waves, which most likely form the structure of a-b-c-d-e. The formation of the downward trend segment may still need to be completed, and it can take any form in terms of structure and extent.
The material has been provided by InstaForex Company – www.instaforex.com
Related Posts: