29.05.202009:10 Forex Analysis & Reviews: Analysis and forecast for EUR/USD on May 29, 2020

Hello, dear colleagues!

Daily

At yesterday's trading, the main currency pair of the Forex market showed fairly strong growth. Euro bulls managed to complete the maximum task - to break through the level of 1.1065 and bring the quote up from the daily Ichimoku cloud.

Perhaps mixed macroeconomic statistics from the United States of America contributed to this, however, in my opinion, it turned out to be more negative. Contrary to forecasts (minus 4.8%), the change in GDP for the first quarter was minus 5%. This is an extremely important and revealing point about the consequences of COVID-19, which are already being felt and which the world's leading economy has yet to experience. As for the pandemic itself, its focus is in Brazil and the United States. At the same time, the United States holds first place in the number of deaths from coronavirus, which has already exceeded 100,000.

Now about unemployment in the US. Although the growth in the number of unemployed has decreased slightly, the figure is still simply incredible. Just think about it - 2 million 123 thousand people applied for primary unemployment benefits last week! In this regard, many experts say that the crisis may drag on for quite a long time, and plans for economic recovery are at risk.

The situation with unemployment is extremely interesting. On the one hand, employers cannot afford to hire or maintain their employees to reduce costs. On the other hand, Americans who receive unemployment benefits are in no hurry to find work, since the weekly federal benefit is often more than the potential wage. Such benefits are provided until July 31, and there is a tense debate in the US Congress about whether to extend their validity.

At the moment, according to reports from the United States Department of Labor, there are 41 million unemployed people in the country, half of whom are on welfare. Not bad, right?! This life suits many people. Why work when you receive benefits that usually exceed your earnings? In general, we have settled in well.

However, let's go back to the technical picture for EUR/USD and analyze it. Yesterday's close at 1.1077 makes it clear that the pair is ready for further strengthening, with the nearest targets being 1.1100, 1.145, 1.1175, and 1.1200. Today, at the time of writing, the exchange rate was already rising to 1.1099, but then it rolled back a little, and right now the euro/dollar is trading in the vicinity of 1.1100.

It's an unusual day today. The so-called "Triple Close", when the market will close May trading, the weekly session, and today. On such days, it is always difficult to predict price movement, and it is not necessary to open new positions, especially since the weekend is ahead.

In such situations, two scenarios are considered most likely. Either an adjustment occurs against the background of fixing positions or the growth continues and the trading closes at new maximum values. Let's see what the picture is on the lower timeframes and whether it is possible to find points for entering the market there.

H1

At the end of the review, the pair goes up from the ascending channel and breaks through the important mark of 1.1100. If three consecutive hourly candles close above this level, you can try to buy at 1.1100-1.1095 on the pullback to the area of 1.1100, but with small goals, in the area of 1.1140.

If the breakdown of the upper border of the channel and the level of 1.1100 turns out to be false and a bearish candle or a combination of candles appears under the line and the level, it is risky to try to sell with targets near 1.1065.

At the same time, do not forget that at 13:30 (London time), the US will receive a block of macroeconomic statistics, where you can highlight changes in the level of spending and income of Americans, the main index of personal consumption expenditures, as well as the balance of foreign trade. Be careful! When opening new positions, it is not necessary to postpone them to Monday, and it is better to close already open transactions before the end of trading.

Good luck!