27.05.202005:16 Forex Analysis & Reviews: Forecast for EUR/USD on May 27, 2020

EUR/USD

Excellent data on house sales in the primary market came out on Tuesday - the April indicator showed 623,000 against expectations of 492,000 and 619,000 in March. A little earlier, in the afternoon, the consumer climate index in Germany from GfK in June showed an increase from -23.1 to -18.9 (forecast -19.1), which gave the first impetus to the euro's growth. But the single currency's growth on strong US data is more interesting, while all markets were up; S&P 500 1.23%, the yield on government bonds increased, which means that market players got rid of "tools of fear", and gold also fell in price by 0.75% with a vigorous growth in industrial non-ferrous metals. This is a classic picture of buying risk, growing interest in high-yield instruments. And if the pattern of euro's growth amid positive data from US economic data continues for about two weeks, this trend may develop into a long-term one, as was the case from the summer of 2012 to the spring of 2014. The intensification of the US-Chinese trade war, the "hard" Brexit and the likely second wave of the coronavirus epidemic can prevent this scenario. That is, the history of the summer of 2012/spring of 2014 will repeat itself as a farce. In the practical part, this means that buying the euro even on an established trend will be very risky.

The euro has reached the upper limit of the almost two-month range of 1.0767-1.0995. The price is higher than both indicator lines and the Marlin oscillator is in the zone of a positive trend, and the signal line of the oscillator is developing exactly according to its own support of the trend line. The probability of continued price growth is 75-80%. Overcoming the upper limit of the range will increase the optimism of traders and the price will go to the channel line in the region of 1.1140.

The price is also higher than the indicator lines and Marlin in the growth zone on the four-hour chart. Consolidating the price over 1.0995 will be a condition for growth to 1.1140. Recovery of the falling mood will occur after the price drops to the signal level of 1.0885.