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EUR/USD – 4H.
As seen on the 4-hour chart, the EUR/USD pair continues the process of falling and performed a consolidation under the correction level of 50.0% (1.1277). As a result, the fall of quotations can be continued on June 14 in the direction of the next correction level of 38.2% (1.1238). Yesterday, traders learned the change in industrial production in April in the European Union -0.4%. This news has forced traders to get rid of the euro again, so we see that now weak economic reports from Europe are beginning to affect the mood of the currency market. Europe has plenty of other problems in addition to poor economic performance. For Example, Italy. For several months, the EU intends to fine the country for exceeding the permissible amount of public debt. The Italian government is trying to convince the European Commission that it is working to correct the situation and by mid-July, all disputes will be settled. But earlier, information of a different nature has been repeatedly received, according to which the Italian government is dissatisfied with the possible penalties from the European Union and considers them unfair. If the US does not disappoint traders with weak data again in the near future, the EUR/USD pair can safely continue to fall.
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 performed a consolidation below the Fibo level of 50.0%. So I recommend selling the euro today with a target of 1.1238, a protective order above the Fibo level of 50.0%. I recommend buying a pair of EUR/USD after the close of quotes above the level of 50.0% for the purpose of a correction level of 1.1318 and a stop-loss order at 1.1277.
GBP/USD – 4H.
The GBP/USD pair performed the second return to the correction level of 76.4% (1.2661). A new rebound from this level of correction will again allow traders to count on a reversal in favor of the pound and some growth in the direction of the correction level of 16.8% (1.2796). Fixing the rate of the pair under the Fibo level of 76.4% will increase the chances of the pair to continue falling in the direction of the correction level of 100.0% (1.2437). In the meantime, traders watched yesterday's vote among the Tories of the Conservative Party with particular attention. 10 candidates fought for the post of its leader; the victory in the first round of elections was won by Boris Johnson – an ardent supporter of the early exit from the EU. Three out of 10 candidates left the race, the others came out in the second round. Traders did not appreciate this information, considering it unimportant. The final results of the elections are another matter, but they will not be known until next month. Then, it will be possible to reflect on the future prospects of the pound sterling. If Johnson wins, it will only increase the likelihood that the UK will leave the European Union on time, that is, October 31. In all other respects, the situation will not change much with the arrival of Prime Minister Johnson or any other candidate.
The Fibo grid is built on the extremes of January 3, 2019, and March 13, 2019.
GBP/USD – 1H.
As seen on the hourly chart, the pair pound/dollar performed a return to the correctional level of 161.8% (1.2673), from which three rebounds had already been made. A new rebound from this level of Fibo will work again in favor of the English currency and the beginning of growth in the direction of the correction level of 127.2% (1.2781). Closing of the pair below the level of 161.8% will allow traders to expect a further fall in the direction of the correction level of 200.0% (1.2554). Today, the emerging divergence is not observed in any indicator on one chart.
The Fibo grid is built on the extremes of April 25, 2019, and May 3, 2019.
Forecast for GBP/USD and trading recommendations:
The GBP/USD pair returned to two important levels of correction on two charts. I recommend buying the pair with the target of 1.2781, with the stop-loss order below 1.2673, if there is a new rebound from the level of 161.8%. I recommend selling a pair when closing quotes below the Fibo level of 76.4% (4-hour chart) with the target of 1.2554 and a protective order above the level of 1.2673.
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