23.05.201910:29 Forex Analysis & Reviews: Wave analysis of EUR / USD and GBP / USD for May 23. How will the European Parliament elections affect the Eurocurrency?

EUR / USD

On Wednesday, May 22, trading on the EUR / USD pair ended with a decline of 10 basis points. The wave pattern of the instrument does not change completely, as the euro drops by 10-20 bp each day, continuing to build a downward wave, presumably 3, 3, 3. Markets can only remain in the trend, whose immediate goals are located around 11 figures and below. Today, on Thursday, the elections to the European Parliament will begin. The main question is one: will a sufficient number of euro skeptics take their places among the 751 deputy seats? Rumors in the current elections suggests that the number of populist deputies will increase dramatically, which has been going for a long time. How can this affect the euro? Most likely, it has no effect in the short term. In order for the impact of the election results to begin, the Parliament should start taking appropriate decisions, different in nature from current policies. I believe that the small bursts of activity are possible, and even then the election results will be known, not earlier than next Monday.

Sales targets:

1.1097 - 161.8% Fibonacci

1.1045 - 200.0% Fibonacci

Purchase goals:

1.1324 - 0.0% Fibonacci

General conclusions and trading recommendations:

The euro / dollar is still in the process of building a downward trend.Now, I recommend for the bears to remain on the instrument with targets at 1.1097 and 1.1045, which corresponds to 161.8% and 200.0% Fibonacci. I recommend transferring a restrictive order to the level of 100.0% Fibonacci.

GBP / USD

On May 22, the GBP / USD pair lost another 45 basis points and came up against the Fibonacci level of 161.8%. Estimated wave continues to build and, given the news background, it can take a very long look. Markets diligently get rid of the pound against the background of complete uncertainty about the future of Brexit. Moreover, yesterday, the information was released saying that Theresa May could resign on May 24, that is, tomorrow. On one hand, it can positively affect the pound. Meanwhile, this also means the arrival of a new prime minister, with new views on Brexit, who will most likely try to start new negotiations with the European Union or whether to go to the unordered Brexit. Anyway, the pound may start to grow at first, so that it coincides with the completion of the construction of the wave. Furthermore, everything will depend on the actions of the new prime minister.

Sales targets:

1.2554 - 200.0% Fibonacci

1.2360 - 261.8% Fibonacci

Purchase goals:

1.3175 - 0.0% Fibonacci

General conclusions and trading recommendations:

The wave pattern of the pound / dollar instrument implies a continuation of the instrument decline within the wave c. Thus, now I still recommend selling pounds sterling with targets located near the calculated levels of 1.2554 and 1.2360, which corresponds to 200.0% and 261.8% of Fibonacci. An unsuccessful attempt to break through the 1.2554 mark could lead to the completion of the downward wave.