FX.co ★ Analysis of EUR/USD on May 17. Weak US statistics last Friday did not add optimism to sellers

On the H4 chart, the wave pattern is still absolutely understandable and does not require any additions. Looking at the expected wave 1 as part of the new upward trend, it becomes clear that wave 3 or c is also likely to be quite extended. This is indirectly supported by a very small wave 2. In addition, the internal wave structure of the supposed wave 3 does not cause any doubts. At this time, waves 1 and 2 in 3 have presumably done forming, therefore, the construction of wave 3 in 3 has begun with targets located up to the level of 1.2350. The unsuccessful attempt to break through the 38.2% Fibonacci level also indirectly indicates the readiness of the markets to build a new upward wave. In turn, a successful attempt to break through the 23.6% Fibonacci level will give confidence in the future increase in the quotes of the Euro currency. Thus the EUR/USD pair is expected to further rise.

Last Friday, there was a news background for the main currency pair, but the markets were actively trading during the day without it. The instrument gained about 75 basis points by the end of the day, with a steady movement. Thus, the US statistics, which was published in the afternoon, could only further reduce the demand for the US dollar, which was not used by it during the day. The April retail sales report showed that its volume was unchanged from March. And if we take the indicator "excluding car sales", then the volume fell by 0.8%. This report alone was able to disappoint the markets in relation to the US currency. On the other hand, the report on industrial production turned out to be slightly better, whose volume rose by 0.7% in April.

All the other reports were much less interesting and significant compared to the ones voiced. Thus, the increase in the quotes of the instrument in the second half of the day on Friday could be due to the US statistics, but it cannot be said that the dollar declined precisely because of these reports at the end of that day. It is assumed that the wave pattern still plays a big role for the prospects of the instrument. At this time, only the 23.6% Fibonacci level (1.2175) can serve as an obstacle to further growth. It had previously stopped the instrument from rising. Last time, there was a construction of a correction wave, and now, on the contrary, the construction of an upward wave should continue. Therefore, this level is expected to be broken through.

Based on the analysis, an upward trend will still form. At this time, the construction of the correctional wave 2 or b, as well as the internal wave 2 as part of the assumed 3, could have already been completed. Thus, it is suggested to buy the instrument with targets near the 23rd mark. There are no reasons to revise the current wave pattern yet.

The wave pattern of the upward trend section still has a fully completed five-wave form and is not going to get complex yet. But the section of the trend, which started to form immediately after it, took on a corrective and fully completed form. If the current wave pattern is correct, then the formation of a new upward trend section has begun and continues, and its two first waves have recently completed.