18.05.202111:15 Forex Analysis & Reviews: Analysis and forecast for EUR/USD on May 18, 2021

In today's article on the main currency pair of the Forex market, we will briefly summarize the results of the previous weekly trading, identify the most important events of this week, and also try to predict the further price movement of EUR/USD and give trading recommendations for this instrument.

Weekly

So, at the auction on May 10-14, the market demonstrated its unwillingness to move the course in the southern direction. It can be judged by the last weekly candle with a long lower shadow, which is several times larger than the bearish body itself. And the confident closing price of last week above the important technical level of 1.2100 also leaves good chances for the continuation of the bullish scenario. The priority for the players to increase the rate is to break the resistance of sellers at 1.2181, where the maximum values of the previous weekly trading were shown. It is what is happening at the moment of writing this article.

Let's touch on the most important fundamental events. They should be considered the minutes of the last meeting of the US Federal Reserve Open Market Committee, published tomorrow, at 19:00 London time. Given the sharp inflationary jumps and the ongoing recovery of the US economy from the effects of the COVID-19 pandemic, it will be very interesting to hear fresh new comments on these and other points from the heads of the Federal Reserve System. From the European macroeconomic reports, the attention of market participants will be drawn to the data on the GDP of the eurozone, which will be published today at 10:00 (London time), and the consumer price index, which will be presented tomorrow at the same time.

Daily

After a fairly impressive growth on Friday, the euro/dollar pair showed a modest strengthening in yesterday's trading. Perhaps this is due to the first trading day of the week and the expectation of the main events of the current five-day period. However, at the time of writing this article, the upward movement of EUR/USD is gaining momentum, and the euro bulls are trying to overcome the strong resistance of sellers at 1.2181. In case of passing this barrier, the next goals of the players to increase the rate will be the levels 1.2200 and 1.2242.

Trading recommendations for EUR/USD:

As before, I consider purchases to be the main trading recommendation for the euro/dollar. However, there are several options for opening long positions. The first is to wait for the true breakdown (with consolidation) of the resistance level of 1.2181 and buy on the rollback to the broken mark with small goals of 1.2200 and 1.2240. The second option will be another pullback down to the area of 1.2150, and when bullish patterns of Japanese candlesticks appear on smaller timeframes, you can try opening purchases. For sales, you need to see a daily reversal pattern of candle analysis, which will appear after an unsuccessful attempt to break through the resistance of 1.2181. The same signal can be used on the four-hour chart. However, as you know, signals on higher timeframes have greater strength. That's all for now. In tomorrow's article, we will analyze smaller time intervals and make necessary changes to today's trading recommendations for EUR/USD.