Wave Analysis by InstaForex

Forex Analysis & Reviews: EUR/USD Forecast for May 22, 2025

On Wednesday, the euro successfully consolidated above the 1.1266 level and the balance indicator line. The next target levels are 1.1420 and 1.1535. The Marlin oscillator is about to enter the area of upward trend momentum.

Today, strong economic reports are expected from the Eurozone. Germany's IFO Business Expectations Index for May is forecast to rise from 87.4 to 88.0, while the Eurozone Composite PMI may increase from 50.4 to 50.7. In the U.S., the Services PMI for May is expected to rise from 50.8 to 51.0 points. These figures could help maintain market risk appetite.

The price continues its planned upward movement above the indicator lines and support levels on the four-hour chart. The Marlin oscillator has slightly pulled back to ease tension and prepare for further growth.

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Forex Analysis & Reviews: EUR/USD Forecast for May 23, 2025

The Eurozone PMI data for May, published yesterday, was disappointing. The Manufacturing PMI dropped from 49.0 to 48.4 (vs. expectations of 49.2), and the Services PMI declined from 50.1 to 48.9 (vs. forecast of 50.4). In addition, several European Central Bank members (Knot, Wunsch, Centeno) spoke in favor of a "timely" rate cut at the next meeting. These developments pushed the euro down by 47 pips. On the other hand, the U.S. PMI data was strong: Manufacturing PMI came in at 52.3 (vs. 49.2 forecast and 50.2 in April) Services PMI rose from 50.8 to 52.3 (vs. forecast of 51.0) Initial jobless claims fell from 229K to 227K Despite this, stock indices closed mixed (S&P 500 -0.04%), which forced the markets to pause and reassess. Thus, European developments alone are unlikely to change the current upward trend in the euro. Instead, this signals the need to watch equity markets more closely.

The euro only slightly pierced through the 1.1256 support level on the daily chart. The Marlin oscillator bounced off the boundary of the bullish territory, suggesting a technical correction for the euro. Today began with upward momentum, and Marlin is again attempting to break through the zero line from below. A white daily candle today could lay the groundwork for stronger bullish momentum next week. At this point, the market seems to have already factored in the rate cut expected in June. Today, Germany's Q1 GDP will be released (forecast: +0.2% after a -0.2% drop in Q4). The U.S. will publish new home sales data for April, expected at 694K versus 724K in March. These figures could further support the euro's growth if they meet expectations.

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Forex Analysis & Reviews: EUR/USD Forecast for May 26, 2025

On Friday, the euro successfully broke above both the balance indicator line and the recent high from May 21. The price is now approaching the next target level at 1.1420, and a breakout above this level would open the path to the next target at 1.1535. If the price consolidates above that, the third target at 1.1692 will come into play.

The Marlin oscillator has established itself in bullish territory and will now continue to support the price movement as long as it does not enter the overbought zone under the main scenario. The price is climbing above the upward-sloping balance and MACD indicator lines on the four-hour chart. A consolidation above the nearest resistance at 1.1420 will allow the price to continue this upward path.

There is a suggestion that the price and the Marlin oscillator may be setting up conditions for a bearish divergence, but this impression emerged after a brief dip below the zero line (gray rectangle), which is now interpreted as a false signal. Therefore, the signal line may continue rising into the overbought zone, and no divergence may form.

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Forex Analysis & Reviews: USD/JPY Forecast for May 28, 2025

Yesterday, the USD/JPY pair posted solid growth—0.90% or 149 pips—on the back of a 0.42% strengthening of the U.S. dollar index. As a result, the price is now trading above the daily balance, and MACD indicator lines, and even the Marlin oscillator has moved into positive territory.

The price may enter the 145.08–145.91 range, but there is a risk that the breakout above the indicator lines is a false move. If the price drops below 143.45 (reinforced by the MACD line), this would confirm the false breakout and support a decline toward the target support at 141.70, potentially continuing to 139.59. If the price does enter the 145.08–145.91 range but fails to hold within it, a reversal back to 143.45 is also expected soon after. Only a confirmed breakout above the 145.91 level would open the door to an alternative scenario, implying further growth toward 148.66.

On the 4-hour chart, the price has slowed down its advance after interacting with the MACD line. The correction reached 38.2% of the latest downward leg, sufficient to complete a corrective phase. Overall, the pair is in a neutral state, and price action over the next one to two days may consist of sideways or erratic movement without clear directional bias.

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Forex Analysis & Reviews: EUR/USD Forecast for May 29, 2025

Main News of the Day: The U.S. Federal Trade Court has blocked the permanent implementation of import tariffs introduced by President Trump, ruling that he exceeded his authority. As an initial reaction to this news, the U.S. Dollar Index rose by 0.53%, S&P 500 futures added 1.50%, and the euro is moving toward testing the target support level at 1.1066. A breakdown below this level would open the path toward 1.0955.

We do not oppose such an unexpected turn of events, at least not in terms of a broad and long-term dollar strengthening, since we have viewed the rise of anti-dollar currencies as a temporary phenomenon from the beginning of the sanctions war. But will today become a pivotal moment? It's quite possible—if, on the weekly chart, the price consolidates below the MACD line, which coincides with May's low at 1.1066. Should this happen, the first downside target would be the March 26 low at 1.0733.

The daily chart shows that the price has broken below the MACD line and the support level at 1.1266. The Marlin oscillator has plunged deeper into negative territory. However, if today's candlestick closes at least at the opening level, this downward move may prove to be false, and the dollar's global advance would be postponed. In that case, the euro might attempt to overcome the 1.1535 level, with a target of 1.1692. Considering market momentum, the absence of clear reversal patterns, stock market optimism, rising yields on U.S. government bonds, and the lack of a yield curve inversion, we maintain the euro's growth as the main scenario.

On the H4 chart, the price has settled below the MACD line and the 1.1266 level. However, this move may turn out to be false. A rise above the MACD line—specifically above the 1.1290 mark, which also coincides with the MACD line on the daily chart—would be a strong signal for growth toward the target level of 1.1420.

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