EUR/USD: forecast for May 16 - 20
EUR/USD has finally broken below the major 1.1360 support on Friday. The new wave of selling was triggered by a combination of weak euro zone’s GDP and much stronger than expected retail sales in the United States. The technical picture paves the ground for a more downside in the pair as the key resistance at 1.1620 proved to be effective. We are now looking for a good point to enter new short positions.
According to our forecast, a break below the 1.1280 support could open the way lower to 1.12. The next target is seen at 1.11. This is the trend support of the current medium-term bullish channel displayed as the violet line on the chart. We remain bearish below 1.1460.
European calendar for the new week is rather light. Watch final euro zone’s CPI on Friday – economists expect the preliminary reading of -0.2% to be confirmed. It means inflation remains depressed despite all the efforts of the European government. On Thursday pay attention to the ECB meeting minutes – in April the regulator decided to leave policy unchanged. Trader’s attention will be glued to the internal disagreements in the ECB and to the renewed economic assessments.
By Kira Iukhtenko