Wave analysis of EURUSD, GBPUSD, USDJPY on May 16.
The market continues to move in the context of the downward impulse wave (5), forming the final wave of the downtrend. Most likely, today we will see the last part of the impulse wave (5), and after a slight decrease, we expect a reversal and a rise in the currency pair. The negative dynamics of credit markets, where the yield differential of the 10-year government bonds of Germany and the United States shows a decline, is evidenced by the fact that we will see a decrease in the next few hours. Also, today we should pay attention to the publication in the US of statistics on the volume of issued permits for construction in March and data on crude oil reserves from the Ministry of Energy for April. Those news could accelerate the movement of quotes for a while.
After completing the construction of the divergent triangle 4, we saw a decrease within the downward momentum 5 of [A]. So far it can be assumed that the fifth wave has turned out to be too small in size, relative to such a large lateral flange 4. That is why today it is possible to continue the decline of the market in the specified momentum. A trend reversal may occur in the evening when wave 5 is formed to the end.
The development of the final part of the ascending end diagonal continues. It is quite probable that a small local downward correction occurs at the last site, after which the price increase will continue. In the favour of the bullish scenario, the situation in the debt market, where the yield differential of the 10-year government bonds of the United States and Japan exceeded the 3% level, is the highest level in recent years. Also, early in the morning, data was released that Japan's GDP fell by 0.2%, which is a negative factor for the pair and will contribute to the rise of USDJPY.
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