FOREX CHART ANALYSIS MAY 19 - SURPRISE AND SHOCK
The first sessions of this week surely brought us some surprises. EUR/USD has taken an unexpected turn. Let's check them out quickly to see what forex trading strategies we should use today.
- US Federal Reserve Chairman Jerome Powell told CBS that the US economy will recover stably in the second half of this year but warns that a complete recovery in the economy could be very time consuming. By the end of 2021. He argues that consumer confidence will return to pre-pandemic levels but a successful vaccine needs to be widely adopted.
- The World Health Organization begins its two-day annual meeting amidst distrust and opposition among the largest members. The meeting will focus on the origin and response to the coronavirus pandemic.
- Crude oil prices reached their highest level since mid-March amid the evidence of rebalancing the market, specifically, energy demand has partly recovered in large markets where many producers. officially and privately, discontinued production under public statements.
- The GBP has fallen to its lowest level since late March after Bank of England chief economist Andrew Haldane told the Telegraph newspaper that BoE's policy-making committee is currently considering negative interest rates.
It continues to be a boring session on the USD/JPY chart. The remarkable point is that the buyers still maintained the control, pushing the price to the resistance level of 107.5. The probability of this area being broken is increasing. We set the short-term goal is 108. A more sustainable uptrend will be confirmed when the price breaks out of this resistance area.
On the EUR/USD chart, something unexpected happened: the upper band of the narrow range was broken with quite strong force. You may consider buying and set Stop Loss within this narrow range. The target is the upper bound of a large range. Price action in the zone of 1.10 will determine our next trading direction.
When we were most confident, GBP/USD bounced back to cold water. Specifically, after establishing a bottom within 7 weeks, the pair recovered strongly. However, things are still not too bad for the sellers because the dropping structure is still intact. Even this pullback can be an opportunity for us to complement our position. Note the resistance area of 1.265 and the MA20 area on the daily chart. When the signal appears, you can add short positions.
USD/CAD is showing signs of re-testing the zone of 1.380. The decline on the daily chart is very strong, so the probability of a price reaching this bottom is quite high. A break of this lower boundary could open a new strong decline to the zone of 1.364. Do not rush to catch the current range bottom.
The price suddenly rebounded sharply to the upper boundary of the current range, but this is not the time to trade. Those who are still stuck with short positions should be prepared to exit. A break of 0.6555 resistance will confirm the return of the uptrend.