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06.05.202208:13 Forex Analysis & Reviews: Breaking forecast for EUR/USD on May 6

This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here.

Today, the US Nonfarm Payrolls report is on tap. Unemployment is expected to decline to 3.5% from 3.6%. Apart from that, the economy is likely to add 385,000 new jobs.

The EUR/USD pair rebounded from the level of 1.0636, which had previously been a swing low logged in spring 2020. Now, it is acting as a resistance level which positively impacted the volume of short positions. After the rebound, the pair returned to the support level of 1.0500.

The RSI indicator is located below 30/50 moving averages on the H4 and D1 charts. It means that traders are actively opening short positions.

The Alligator indicator shows that the moving averages have completed the intersection with a downward movement on the 4H chart. It gives a sell signal.

Outlook

The bearish trend persists. If the price fixes below 1.0500 on the 4H chart, there could be a sharp increase in the volume of short positions. In this case, the downtrend is likely to be extended to a swing low of 2016.

Otherwise, the pair may be stuck in the 1.0500/1.0600 range, delaying the start of the downtrend.

The complex indicator analysis generates a sell signal on the short, intraday, and medium-term charts.

Dean Leo
Analytical expert of InstaForex
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