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18.06.201910:08 Forex Analysis & Reviews: Forecast for EUR/USD and GBP/USD on June 18. A strong bullish divergence has helped the euro

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EUR/USD – 4H.

Exchange Rates 18.06.2019 analysis

As seen on the 4-hour chart, the EUR/USD pair performed a reversal in favor of the euro currency after the formation of a bullish divergence at the MACD indicator and returned to the correction level of 38.2% (1.1237). The rebound of the pair on June 18 from this Fibo level will allow traders to count on a reversal in favor of the US currency and the resumption of the fall in the direction of the correction level of 23.6% (1.1187). Meanwhile, traders continue to wait for the results of the meeting of the Federal Reserve System, which will be known tomorrow. The main problem is that the markets do not have a consensus on what monetary policy the Fed will adhere to until 2019, and this has not been the case for a long time. In the last two years, when the Fed systematically and gradually raised the rate, the dates of these increases were known almost a month, so Powell and the company did not give any surprises. Now, the Fed can begin to reduce the rate (there is a lot of talk about this), and just keep this rate at the current level (the Fed did not give specific signals about its readiness to reduce). In general, tomorrow will be a very interesting day. Today, the euro may again prevent inflation in the European Union, which is projected to be 1.2% in May, but in reality may be lower, as it was last month.

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 made a return to the Fibo level of 38.2%. Thus, I recommend selling the euro with a target of 1.1187 today, a protective order above the Fibo level of 38.2%, if there is a rebound from 1.1237. I recommend buying the EUR/USD pair after the close of quotations above the level of 38.2% for the purpose of the correction level of 1.1277 and a stop-loss order under 1.1237.

GBP/USD – 4H.

Exchange Rates 18.06.2019 analysis

The GBP/USD pair continues its free fall without rollbacks and corrections. If the EUR/USD pair has a question: what can lead to a correction? Then GBP/USD pair has a question too: what can stop the fall of the pound? At the moment, it is very difficult to assume that it can stop the fall of the pound. Perhaps today Mark Carney will make a strong statement, although there is little chance of it. Maybe tomorrow, the Fed will announce a rate cut or announce the readiness for easing monetary policy. Perhaps tomorrow, the EU leaders will begin to say that they are ready for new negotiations on Brexit with London. However, all these "perhaps" has a very weak probability. That is, such a development is possible but unlikely. Thus, we can only wait and sell the pound in accordance with the bearish mood of traders. Perhaps, technical factors will help the pound, for example, a rebound from the Fibo level of 100.0% (1.2437), which will allow traders to expect a turn in favor of the English currency and some growth in the direction of the correction level of 76.4% (1.2661). Today, new emerging divergence is not observed in any indicator.

The Fibo grid is built on the extremes of January 3, 2019, and March 13, 2019.

GBP/USD – 1H

Exchange Rates 18.06.2019 analysis

As seen on the hourly chart, a bullish divergence is brewing in the MACD indicator, but there are strong doubts that it will help the pair to go above the correction level of 100.0% (1.2558). The rebound of the pair from the level of 127.2% (1.2503) will work similarly in favor of the pound sterling and some growth of the pair. Closing quotations under the correction level of 127.2% will increase the chances of further fall towards the next correctional level of 161.8% (1.2431).

The Fibo grid is built according to the extremes of May 31, 2019, and June 7, 2019.

Forecast for GBP/USD and trading recommendations:

The GBP/USD pair performed a consolidation under the correction level of 100.0%. I recommend continuing to sell the pair with the target of 1.2503, with the stop-loss order above 1.2606. I recommend buying the pair at the rebound of quotes from the Fibo level of 127.2% (hourly chart) with a target of 1.2558 and a protective order under the level of 1.2503, especially in conjunction with bullish divergence.

Samir Klishi
analytik InstaForexu
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