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02.05.202309:18 Forex Analysis & Reviews: Hot forecast for EURUSD on 02/05/2023

Despite the fact that yesterday was a public holiday in Europe, the market did not stand still, and the dollar eventually managed to significantly strengthen its positions. The only reason for its growth was the end of the saga with First Republic Bank, which will be sold to JPMorgan Chase. However, this decision by the regulator raises several questions. In particular, after this acquisition, JPMorgan Chase becomes not only the largest bank in the United States but also violates antitrust laws in terms of total deposits. Moreover, it turns out that all the measures to save the bank, involving a whole range of large investors, raises the question about the possibility of saving distressed financial institutions in principle. And that is perhaps the most frightening thing. Nevertheless, any resolution of the issue, without bankruptcy and writing off losses, is already positive news in itself, which has become the reason for the dollar's strengthening.

But today, the market is likely to return to the levels it was at before the opening of yesterday's trading session in the United States. The reason will be the preliminary estimate of inflation in the eurozone. After all, according to the most modest forecasts, the pace of consumer price growth may remain unchanged. There is even a suggestion that inflation may accelerate from 6.9% to 7.0%. And there is not a single forecast predicting a decrease in inflation. This means that the European Central Bank is likely to raise the refinancing rate by as much as fifty basis points this week. The very prospect of such a move creates the basis for the euro's growth. However, no one will take such risks ahead of the board meeting, so today's growth will be somewhat limited.

Inflation (Europe):

Exchange Rates 02.05.2023 analysis

Despite the fact that the euro opened the new week by falling against the dollar, the quote is still in the area of the 1.1000 level. There are no radical changes observed on the trading chart.

During the sharp price change, on the four-hour chart, the RSI technical indicator crossed the middle line 50 downwards. This signal indicates an increase in the volume of short positions for the euro. However, pay attention to how the indicator behaved since April 27th, it was purposefully moving along the average level, indicating a slowdown in the upward cycle.

On the same time frame, the Alligator's MAs have numerous intersections, which corresponds to the current stagnation.

Exchange Rates 02.05.2023 analysis

Outlook

In this situation, there is no clear technical signal that the upward cycle is over. For this reason, climbing above the 1.1050 level may lead to a new increase in the volume of long positions, which in turn may lead to an update of the local high of the medium-term trend.

In order to consider the bearish scenario, the quote needs to stay below the 1.0940 mark. In this case, there is a risk of the price transitioning to a full-scale correction.

The comprehensive indicator analysis in the short term indicates a downward cycle. In the intraday period, there is an alternate signal. In the medium term, the growth signal remains unchanged.

*Phân tích thị trường được đăng tải ở đây có nghĩa là để gia tăng nhận thức của bạn, nhưng không đưa ra các chỉ dẫn để thực hiện một giao dịch.

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