2020-06-22 • Updated
EUR/USD has started the week with the right leg after falling down for almost two weeks. Most analysts link this risk appetite with eased restrictions all over the world. Also, the US data turned out better than analysts expected, what improved the market sentiment. In addition, last week several central banks gave more optimistic prospects for the economy which kept risk assets well bid. The US President Donald Trump claimed that he "can't shut down the economy again". Even if the second wave comes again, its impact will be less devastating and more localized.
Nevertheless, there are factors that weigh on the European single currency. First of all, fears of a second COVID-19 wave are competing with the encouraging economic data. The World Health Organization reported 183,000 new cases on Sunday which is the largest daily increase on record. Also, Friday's European Council meeting left a lot of uncertainty as EU members couldn’t make any agreement on the coronavirus recovery fund. Investors will wait for the July meeting for some hints.
It will be the big day for EUR on June 23 as traders will get French, German and EU Manufacturing PMI starting at 10:15 MT time. These indicators will help to understand the real state of the EU economy these days. If the data comes better than forecasts, EUR will rise. Also, take a look at the US Manufacturing PMI, that will be released later the same day at 16:45 MT time. It will add some volatility to EUR/USD, as well. According to Goldman Sachs, "Recent developments are a good reminder that “bad news” from the US can paradoxically lift the Dollar if it affects investor risk appetite or raises questions about the global economic outlook." Based on that, we can assume that the positive US data will push EUR up.
On the weekly EUR/USD chart you can easily notice that the 200-week moving average is the barrier that EUR/USD has failed to break twice during the crisis. It will continue to play this role for the week ahead. The 200-weak MA is currently seen at 1.1330. However, on the daily chart the closest resistance is at 1.125. From the bearish perspective, if it breaks down the support at 61.8% Fibonacci level at 1.1165, it will fall even lower to 50% Fibo at 1.1065. Follow the EU PMI tomorrow!
Crude oil futures surged on Monday due to disruptions in Russian refining capacity caused by Ukrainian drone strikes and Moscow's decision to cut output to comply with OPEC+ targets. The West Texas Intermediate (WTI) contract for May settled at $81.95 a barrel, up $1.32, while the Brent contract for May settled at $86.57 a barrel, also up $1.32. Russia instructed...
Bearish scenario: Sales below 80.00 with TP1: 79.60... Anticipated bullish scenario: Intraday purchases above 80.70 with TP: 81.50...
Brent oil is currently on a bullish trend, facing resistance near $84 and supported by the 200-day EMA. Breaking above this level could lead to a climb towards $90. Short-term support is observed around $80, backed by the 50-day EMA. As summer approaches and travel increases, crude oil tends to benefit from seasonal patterns. Despite temporary setbacks, buying...
Jerome H. Powell, the Federal Reserve chair, stated that the central bank can afford to be patient in deciding when to cut interest rates, citing easing inflation and stable economic growth. Powell emphasized the Fed's independence from political influences, particularly relevant as the election season nears. The Fed had raised interest rates to 5.3 ...
Hello again my friends, it’s time for another episode of “What to Trade,” this time, for the month of April. As usual, I present to you some of my most anticipated trade ideas for the month of April, according to my technical analysis style. I therefore encourage you to do your due diligence, as always, and manage your risks appropriately.
Bearish scenario: Sell below 1.0820 / 1.0841... Bullish scenario: Buy above 1.0827...
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Don’t waste your time – keep track of how NFP affects the US dollar and profit!
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