The amplitude of the last 5 days (high-low): 38p – 29p – 39p – 49p – 27p.
Average amplitude over the last 5 days: 36p (47p).
As we expected in the evening review yesterday, the euro/dollar pair began to adjust on the last trading day of the week and month. Correction – purely technical, associated with the desire of traders to fix part of the profit at the end of the month and week. No strong data from Europe has been received today to provoke the strengthening of the European currency. America received data on personal expenses and income of Americans in April. Both indicators exceeded the forecast values, so it would be more logical to see the strengthening of the US dollar. However, as we have already noted, the desire of traders to close some short positions was stronger. Thus, the European currency closes the month of May near the lows of the year. In terms of the Foundation, we can sum up some results: Donald Trump’s trade wars have a very indirect impact on the EUR/USD pair, the problems of the eurozone are more important in the eyes of traders, weak statistics from America in recent weeks only pressed the US currency for a while. Thus, in general, we can say that the mood of traders remains bearish. Next month, we expect to overcome the lows of this month with a further fall of the euro. We also note that the average volatility for the last 5 days was 36 points, which indicates not too much desire of bears to sell the pair at such low price levels. Theoretically, the 1.11 point can become a reversal for the pair. However, the fundamental component gives a high probability for the continuation of the formation of the downward trend.
The pair EUR/USD started to adjust at the end of the month. Thus, if the pair remains below the critical line, then on Monday, it is recommended to wait for the MACD indicator to turn down and resume selling the euro with the target of 1.1122.
Long positions can be considered if traders manage to gain a foothold above the critical line. In this case, the nearest target for bulls will be the resistance level of 1.1194 (very short target).
In addition to the technical picture should also take into account the fundamental data and the time of their release.
Explanation of illustration:
Tenkan-Sen – red line.
Kijun-Sen – blue line.
Senkou Span A – light brown dotted line.
Senkou Span B – light purple dotted line.
Chinkou Span – green line.
Bollinger Bands indicator:
3 yellow lines.
A red line and a histogram with white bars in the indicator window.