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EUR/USD – 4H.
As seen on the 4-hour chart, the EUR/USD pair, after a reversal in favor of the European currency two days earlier, continues the growth process and closed above the correction level of 76.4% (1.1241). Such strong growth, unusual for the euro, may well mean the end of the downward trend, which was formed about six months. But there are still some doubts about this. First, the peak of May 13, the euro/dollar pair has not passed. Secondly, news and reports from Europe and America are not unambiguously on the side of the euro. For example, yesterday we witnessed the weakest indices of business activity in the industrial sector of the European Union (47.7), and Germany (44.3). Given the fact that a value below 50.0 is considered a sign of a downturn in an industry, the news for the eurozone is bad. But the US indices of business activity were weaker than forecasts. However, we are not talking about the decline yet. Markit – 50.5, ISM – 52.1. That is, the decline in business activity is observed in America, but it is not yet "dangerous" in nature. That is, we can say that yesterday's reports were more negative just in the direction of the euro, but, nevertheless, it was the euro that showed growth. Thus, in the coming days, it is still possible to resume the fall of the pair in the direction of the correction level of 127.2% (1.1102).
The Fibo grid was built on extremums from March 7, 2019, and March 20, 2019.
Forecast for EUR/USD and trading recommendations:
The pair EUR/USD closed above the correction level of 76.4%. So I recommend buying the euro with a target of 1.1281, a protective order under the Fibo level of 76.4%. I recommend selling the EUR/USD pair after closing the quotes below the level of 76.4% for the purpose of a correction level of 1.1177 and a stop Loss order above 1.1241.
GBP/USD – 4H.
Everything that is written in the previous part of the article on the EUR/USD pair does not apply to the British pound sterling. If traders of the euro/dollar pair are happy to react to weak US business activity, do not pay attention to the "recessive" activity in Europe, then traders of the pound/dollar pair continue to look for opportunities exclusively for sales. Forex continues to view the pound as the most unattractive currency to buy. And it will be considered in this way further as long as the country does not solve all the issues related to Brexit. It feels like Trump decided to visit the UK to help the country with the choice of the "right" option and push it to action. Recently, Brexit was associated only with conversations: who will be the new Prime Minister when Theresa May leaves, what option now to adhere to in order to still implement the exit from the EU? There were no concrete actions. Trump has already advised London to leave the European Union as soon as possible, without paying any fines and without any transactions. He made it clear that he supported this option, which makes Nigel Farage and Boris Johnson like-minded. On June 4, the pound sterling performed a return to the Fibo level of 76.4%. The rebound of quotations from this level will allow expecting a reversal in favor of the US currency and the resumption of the fall in the direction of the correction level of 100.0% (1.2437).
The Fibo grid was built on extremums from January 3, 2019, and March 13, 2019.
GBP/USD – 1H.
As seen on the hourly chart, the pair GBP/USD executed a return to the correction level of 161.8% (1.2673). Thus, on two charts, the quotes of the pair have stumbled into strong resistance. The retreat from these levels is very likely and will allow traders to count on the resumption of the fall in the direction of the correction level of 200.0% (1.2554). Today, the divergence is not observed in any indicator.
The Fibo grid was built on extremums from April 25, 2019, and May 3, 2019.
Forecast for GBP/USD and trading recommendations:
The GBP/USD pair has fulfilled the growth to the correction level of 1.2673. I recommend selling the pair with the target of 1.2554 if the rebound from the Fibo level of 161.8% with the stop-loss order above the level of 1.2673 is executed. I recommend buying the pair at the close above the Fibo level of 161.8% (hourly chart) with a target of 1.2782 and a protective order under the level of 1.2673.
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