EUR / USD
Friday, September 27, ended for the EUR / USD pair with an increase of 15 basis points. However, the previous two local minimums, supposedly waves 3 and 5 to 5, have been updated. Thus, the entire wave pattern of the downward trend section has become more complicated and now has a 5-wave form. If this assumption is true, then the decline in the euro-dollar pair will continue with targets located near the levels of 127.2% and 161.8% Fibonacci. Meanwhile, wave 5 can turn out to be quite extended if the news background remains negative for the euro, and at the moment, I think that it is negative.
Fundamental component:
On Monday, the foreign exchange market will monitor unemployment reports from the European Union, as well as retail sales and preliminary inflation from Germany for September. Despite the "loud" names of the reports, I believe that market activity will not increase today. Monday is likely to be held in a quiet and peaceful bid. The unemployment rate in the eurozone is also unlikely to change its value compared to July and will be 7.5%.
Despite that, even if unemployment decline, this does not mean that the euro will show growth today. Economic reports from Germany are interesting, but these are reports only under one of the 27 EU member states, that is, Germany has a great influence on the pan-European economy, but it is still just one country, so with reports from Germany I would not be too worried .
Purchase goals:
1.1109 - 0.0% Fibonacci
Sales goals:
1.0876 - 127.2% Fibonacci
1.0814 - 161.8% Fibonacci
General conclusions and recommendations:
The euro-dollar pair has transformed the entire wave markup. Now, I expect the pair to continue to decline with targets located near the calculated levels of 1.0876 and 1.0814, which equates to 127.2% and 161.8% Fibonacci. Wave 5 can turn out to be both very long and shortened. Thus, I recommend selling the instrument on a MACD signal down.
GBP / USD
On September 26, GBP / USD lost another 40 basis points. Thus, presumably, the first wave continues to be constructed as part of a new descending trend section, which can turn out to be both 5-wave and 3-wave. The news background for the pair, in turn, remains the number 1 factor in influencing the dynamics and direction.
Fundamental component:
The euphoria of the Forex currency market has calmed down a bit. A few weeks ago, traders discussed the transfer of Brexit in full swing. The victory was won by the parliament over Boris Johnson, and now, the clouds are gathering over the UK again. The situation on Brexit began to get confusing again. The European Union seems ready to provide a new reprieve, but is awaiting London's official request. Boris Johnson should ask for Brexit to be postponed, but he is not going to do this, which is stated in all his interviews. At the same time, the British Parliament ordered Johnson to sign the agreement or postpone Brexit, but it is not clear how he will control the execution of his orders by the Prime Minister. It was all this confusion that brought the bears back to the market, who again felt the vulnerability of the pound. Today, the UK GDP for the second quarter has already been published, which is the final value.
In the first quarter, the increase was 1.8%, but now it was expected no more than 1.2%. The actual value is + 1.3%.
In quarterly terms, a decrease of 0.2% was expected, which coincided with the value of the report. I believe that such values are unlikely to cause strong positive emotions in the markets. Thus, the pound can only grow a little, and then resume the decline.
Sales goals:
1.2229 - 61.8% Fibonacci
1.2147 - 76.4% Fibonacci
Purchase goals:
1.2582 - 0.0% Fibonacci
General conclusions and recommendations:
The upward trend section supposedly completed its construction. Thus, now, I expect a decline in the instrument in the direction of the levels of 61.8% and 76.4% Fibonacci as part of the construction of the first wave. Economic reports from the UK are published, and Brexit's theme remains central to the British pound.
