Euro Slides As ECB Lagarde Warns Of Unprecedented Slump In Euro Area

Trading 30 avr 2020 Commentaire »

The euro depreciated against its major trading partners in the European session on Thursday, after European Central Bank President Christine Lagarde warned of an "unprecedented" downturn in the euro area that is likely to steepen further during this year, and urged coordinated policy action to protect against downside risks and support the recovery.

In her customary press conference, Lagarde said that euro area GDP could fall by between 5 percent and 12 percent this year, depending on the duration of the containment measures and the success of policies to mitigate the economic consequences for businesses and workers.

Measures to contain the spread of the COVID-19 had largely halted economic activity in all the countries of the euro area and across the globe, the ECB chief said.

"Survey indicators for consumer and business sentiment have plunged, suggesting a sharp contraction in economic growth and a profound deterioration in labour market conditions."

Lagarde said that the Governing Council is determined to continue to support households and firms in the wake of the current economic disruption and heightened uncertainty to safeguard price stability target.

Following its scheduled meeting, the Governing Council eased the conditions on the targeted longer-term refinancing operations, or TLTRO. The bank lowered the interest rate on TLTRO operations to 50 basis points below the average interest rate.

In order to support liquidity conditions, a new series of non-targeted pandemic emergency longer-term refinancing operations, or PELTRO, will be conducted from May 2020.

Further, the ECB will continue its EUR 750 billion new pandemic emergency purchase programme in a flexible manner over time, across asset classes and among jurisdictions.

Moreover, net purchases under the asset purchase programme will continue at a monthly pace of EUR 20 billion, together with the purchases under the additional EUR 120 billion temporary envelope until the end of the year.

The ECB left the key interest rate, which is the rate on the main refinancing operations, at record low zero, as expected.

The deposit facility rate was kept at -0.50 percent. The marginal lending facility rate was maintained at 0.25 percent.

Flash estimate from Eurostat showed that inflation slowed in April due to a sharp decline in energy prices.

Inflation slowed to 0.4 percent in April from 0.7 percent in March. Nonetheless, this was above forecast of 0.1 percent. The fall in inflation was largely driven by a 9.6 percent decrease in energy prices.

Data from the Federal Employment Agency showed that German unemployment increased sharply in April as coronavirus pandemic weighed on job creation and economic activity.

The jobless rate rose to 5.8 percent in April from a near-record low of 5.0 percent in March. The rate was forecast to rise moderately to 5.2 percent.

The currency declined against its most major counterparts in the Asian session, as investors await a policy decision from the European Central Bank amid worsening economic situation in the currency bloc.

The euro shed 0.5 percent to 1.0833 against the greenback, after climbing to a 10-day high of 1.0891 at 3:00 am ET. The pair had closed Wednesday's deals at 1.0871. Further drop in the euro may locate support around the 1.06 area.

Having advanced to a 2-day high of 116.14 at 3:00 am ET, the euro turned lower against the yen, falling 0.5 percent to 115.58. The pair was worth 115.92 when it ended deals on Wednesday. Should the euro falls further, it is likely to test support around the 111.00 region.

Data from the Cabinet Office showed that Japan's consumer confidence weakened at a record pace in April.

On a seasonally adjusted basis, the consumer confidence index decreased to 21.6 in April from 30.9 in March.

The euro was down 0.4 percent against the franc, at 1.0548. At Wednesday's close, the pair was valued at 1.0588. The euro is seen facing support around the 1.04 mark.

Data from the Federal Statistical Office showed that Switzerland's retail sales decreased sharply in March amid the coronavirus, or Covid-19 outbreak.

Retail sales fell a working-day and holiday adjusted 5.6 percent year-on-year and 6.2 percent from the previous month in March.

The euro weakened to the lowest level since March 9 against the pound, at 0.8675. The euro-pound pair had finished yesterday's trading session at 0.8722. Immediate support for the euro is likely seen around the 0.84 level.

Data from the Society of Motor Manufacturers and Traders showed that British car production declined in March as coronavirus pandemic forced factories to close.

Car production declined 37.6 percent on a yearly basis in March. Only 78,767 vehicles left factory gates in March.

The single currency remained lower against the loonie with the pair trading at 1.5054. This was a pip short of near a 2-month low set in the Asian session. The euro was trading at 1.5086 per loonie at yesterday's close. The euro is likely to find support around the 1.47 mark.

The 19-nation currency was trading at 1.7683 against the kiwi, not far from near a 2-month low of 1.7661 it recorded in the Asian session. At yesterday's trading close, the pair was quoted at 1.7721. Extension of the euro's downtrend may take it to a support around the 1.72 region.

In contrast, the euro spiked up to a 2-day high of 1.6728 against the aussie, after falling to 1.6539 at 1:00 am ET, which was its weakest level since February 27. The euro-aussie pair was worth 1.6579 at Wednesday's close. Next key resistance for the euro is possibly seen around the 1.80 level.

Data from the Australian Bureau of Statistics showed that Australia export prices rose 2.7 percent on quarter and 2.3 percent on year.

Main contributors to the rise were: Gold, non-monetary (excluding gold ores and concentrates) (+11.4 percent); Metalliferous ores and metal scrap (+2.3 percent); Gas, natural and manufactured (+4.3 percent); and Meat and meat preparations (+4.0 percent).


The material has been provided by InstaForex Company - www.instaforex.com

EUR/USD and GBP/USD. The results of April 30. ECB announced readiness to expand existing incentive and lending programs and

Trading 30 avr 2020 Commentaire »

4-hour timeframe

analytics5eab3303beafc.jpg

Average volatility over the past five days: 76p (average).

For the most part of the fourth trading day of the week, the EUR/USD pair was still trading as indistinctly as the entire first half of the week. With grief in half, quotes of the pair got out of the Ichimoku cloud, however, very briefly, as they literally returned within a few hours and began the next round of a downward correction. Thus, the upward trend persists, and the quotes jumped during the US session. The buy signal from Ichimoku Golden Cross has intensified, and today's volatility (at the time of writing) is 140 points. The most important macroeconomic indicators were published in the European Union today, the results of the ECB meeting were summed up, and the United States released the next data on applications for unemployment benefits, which have become one of the most significant indicators of the state of the American economy in recent weeks. However, traders did not particularly react immediately after all these indicators were released. Only later did the barrier seem to be lifted, after which both the euro and the pound began to grow. Question: what was the reaction to this growth? Yesterday, equally important data were published in the United States, and there was no reaction to them. The results of the Federal Reserve meeting were summed up late in the evening, and although it was generally believed to be boring, uninteresting and passing, traders still got some information. Namely, the Fed does not plan any changes in the parameters of monetary policy in the near future. Thus, the Fed will now wait for the results of those actions that have already been carried out, and wait for the growth of the US economy no earlier than the third and fourth quarters of 2020.

There were so many macroeconomic statistics today that most of them can simply be omitted as secondary. For example, data from Germany. Retail sales decreased by 2.8% in March, which, of course, is worse than forecasted. The unemployment rate jumped to 5.8%, which is again worse than experts' forecasts, and the number of unemployed in April increased by 373,000 with a forecast of +76,000. And remember, at the end of March we were surprised at low unemployment in Germany? Back then it increased by only 0.2%, and the number of applications for benefits filed reached only 1,000 employees. We were still surprised at these figures, since there was a feeling that there was no crisis and epidemic in Germany. It turns out that business did not fire employees only in the first weeks of the crisis, in the hope that quarantine would be short-lived, but a wave of layoffs had already begun in April, which resulted in 373,000 new unemployed.

Oddly enough, the package of macroeconomic statistics from the eurozone turned out to be very optimistic, given the current realities. For example, the unemployment rate in March increased from just 7.3% to 7.4%. This indicator can be estimated in different ways, since in the United States, for example, the usual unemployment rate is much lower. In Germany, this figure, even taking into account the April layoffs, is still lower. Thus, the unemployment rate in the EU as a whole can be considered high, but avoided even stronger growth. But this is in March. In April, unemployment is likely to jump in the same way as in Germany. According to preliminary estimates, the consumer price index in April slowed down to just 0.9% y/y (the previous value of 1.0%). And here the situation is the same as with unemployment. The inflation rate is extremely low, but not surprisingly, it managed to avoid a stronger slowdown in a crisis. As for the Gross Domestic Product in the EU for the first quarter, the situation here is even more interesting. In annual terms, the indicator lost 3.3%, and in the quarterly 3.8%. Forecasts predicted a smaller reduction, but compared with the US, the loss of the European economy is lower. Again, it depends on the angle you're looking at. We believe that it could be much worse, therefore, we consider it relatively optimistic or at least not a failure.

The European Central Bank meeting has already ended, but the press conference is still ongoing. Therefore, this event will be discussed in the following articles. So far, we can only say that the ECB has left the size of key rates unchanged, and also announced its readiness to expand the program to support the economy in the fight against the negative impact of the coronavirus. In principle, such actions of the European regulator can be regarded as dovish, and the European economy, it turns out, needs additional support and stimulation, although this was no secret to anyone. We should not forget that the European Council also intends to adopt a 2-trillion-dollar program to help the economy.

The last thing traders should pay attention to today is the report on applications for unemployment benefits in the US. The index of initial applications reached 3.8 million more in the week of April 24, which is higher than forecasted values. The rate of repeated applications for unemployment benefits hit 18 million with a forecast of 19.2. Thus, we can even say that we received more optimistic data than expected, although the number of Americans who lost their jobs still remains gigantic. Also today it became known that personal incomes of Americans decreased by 2% in March, which has not happened since 2013, and personal expenses decreased by 7.5%, which has never happened in the past 60 years, according to official statistics. As a result, after all the publications on the US trading session, the greenback began to weaken against both currencies. Since European news was not related to the pound, the conclusion suggests itself that the US data is to blame. But the report on applications for benefits turned out to be slightly better than expected, it turns out that the US currency began to become cheaper due to reports on personal income and expenses of Americans?

4-hour timeframe

analytics5eab3318aacc6.jpg

Average volatility over the past five days: 98p (high).

The GBP/USD pair was trading as indistinctly as the EUR/USD pair for most of April 30. Unlike the euro/dollar pair, the British pound's quotes grew during the day, which, however, does not make it possible to draw any conclusions regarding the impact of macroeconomic statistics on the movements of both pairs. One can, of course, assume that European statistics held back the euro to continue to strengthen today in the morning, but why then did the pound rise at the same time? Especially in the morning, when no information has yet arrived from the United States, and no reports were planned in the UK on Thursday? Thus, we are still inclined to the conclusion that the fundamental background now has no effect on traders. It simply continues to be ignored, no matter what happens, no matter what reports are published. Based on this, we still advise you to pay attention to technical analysis.

Recommendations for EUR/USD:

For short positions:

The EUR/USD pair continues to strengthen the upward movement on the 4-hour timeframe. Thus, euro-currency sales can be considered not before the price consolidates below the Kijun-sen line with the first target as the support level of 1.0733.

For long positions:

Long positions are currently relevant, goals at 1.0950 and 1.0985, the first of which has already been worked out. A rebound from any target will signal the beginning of a downward correction.

Recommendations for GBP/USD:

For short positions:

The pound/dollar pair resumed the upward movement. Thus, traders are advised to return to selling the British currency while aiming for a volatility level of 1.2369, not before consolidating the pair below the Kijun-sen line.

For long positions:

Purchases of the GBP/USD pair are relevant at this time, since a rebound from the Kijun-sen line was made. They are recommended to be kept with targets 1.2624 and 1.2748.

The material has been provided by InstaForex Company - www.instaforex.com

*Chicago Business Barometer Tumbles To 35.4 In April

Trading 30 avr 2020 Commentaire »

Chicago Business Barometer Tumbles To 35.4 In April


The material has been provided by InstaForex Company - www.instaforex.com

Italy Enters Recession In Q1 Amid Covid-19 Pandemic

Trading 30 avr 2020 Commentaire »

Italy entered a recession in the first quarter after the national output contracted the most since the series began in 1995 due the coronavirus lockdown, preliminary data from the statistical office Istat showed Thursday.

Despite the lockdown, the unemployment rate declined unexpectedly in March, data revealed. Gross domestic product fell 4.7 percent sequentially in the first quarter, following a 0.3 percent drop in the fourth quarter of 2019. However, economists had forecast a larger 5 percent contraction.

This was the biggest fall on record. The economy fell into a recession as GDP contracted for two consecutive quarters.

On a yearly basis, GDP dropped 4.8 percent, in contrast to a 0.1 percent rise in the previous quarter. GDP was expected to fall 5.1 percent.

Italy is one among the most affected economies from covid-19 pandemic. The statistical office said lockdown has hampered the data collection.

Another report from Istat showed that the unemployment rate declined unexpectedly in March. The jobless rate fell to 8.4 percent from revised 9.3 percent in February, while it was forecast to rise to 10.5 percent.

The unemployment rate among youth aged between 15 and 24, fell to 28 percent from 29.2 percent.

The number of unemployed persons decreased by 267,000 from the previous month.

Preliminary data showed that consumer prices remained flat on a yearly basis in April after rising 0.1 percent in March. The slowdown was largely caused by energy prices.

Economists had forecast consumer prices to fall 0.2 percent on a yearly basis.

Month-on-month, consumer prices gained 0.1 percent, confounding expectations for a fall of 0.3 percent.

EU harmonized inflation remained unchanged at 0.1 percent in April. On a monthly basis, the harmonized index of consumer prices advanced 0.5 percent.


The material has been provided by InstaForex Company - www.instaforex.com

Finland Trade Deficit Widens Less Than Estimated In February

Trading 30 avr 2020 Commentaire »

Finland's visible trade deficit widened less than initially estimated in February, final figures from the Finnish Customs showed on Thursday.

The trade deficit increased to EUR 746 million in February from EUR 121 million in the same month last year. According to the initial estimate, trade deficit was EUR 770 million.

Exports dropped 14.6 percent year-on-year in February. In the initial estimate, exports fell 15.2 percent.

Imports fell 2.7 percent annually in February. According to the initial estimate, imports fell 2.5 percent.

Exports to the EU countries decreased 13.6 percent in February. In the initial estimate, exports fell 14.6 percent.

Imports from EU countries fell 1.5 percent in February. According to the initial estimate, imports fell 1.9 percent.

Shipments to countries outside the EU dropped 15.7 percent and imports from them declined 3.7 percent.

For the January-February period, trade deficit widened to EUR 1.0 billion from EUR 393 million a year ago. According to the initial estimate, trade deficit was EUR 1.1 billion.


The material has been provided by InstaForex Company - www.instaforex.com

U.S. Weekly Jobless Claims Drop To 3.839 Million

Trading 30 avr 2020 Commentaire »

A report released by the Labor Department on Thursday showed a notable decrease in first-time claims for U.S. unemployment benefits in the week ended April 25th, although claims remain at a significantly elevated level.

The Labor Department said initial jobless claims tumbled to 3.839 million, a decrease of 603,000 from the previous week's revised level of 4.442 million.

Economists had expected jobless claims to drop to 3.500 million from the 4.427 million originally reported for the previous week.

The report said the less volatile four-week moving average also dropped to 5,033,250, a decrease of 757,000 from the previous week's revised average of 5,790,250.

Jobless claims have steadily decreased since reaching a record high of 6.867 million, although the number of new claims has topped 30 million since the coronavirus-induced economic shutdown.

The Labor Department said continuing claims, a reading on number of people receiving ongoing unemployment assistance, spiked by 2.174 million to a record high 17.992 million in the week ended April 18th.

The four-week moving average of continuing claims also jumped to 13,292,500, an increase of 3,733,250 from the previous week's revised average of 9,559,250.

Next Friday, the Labor Department is scheduled to release its closely watched monthly employment report for April.


The material has been provided by InstaForex Company - www.instaforex.com

ECB Boosts Support As Eurozone Shrinks At Record Pace

Trading 30 avr 2020 Commentaire »

The European Central Bank strengthened its liquidity supportive measures as the currency bloc contracted at the sharpest pace since 1995 as most of the member states introduced coronavirus containment measures.

Following its scheduled meeting on Thursday, the Governing Council of the ECB decided to ease the conditions on the targeted longer-term refinancing operations, or TLTRO. The bank lowered the interest rate on TLTRO operations to 50 basis points below the average interest rate.

In order to support liquidity conditions, a new series of non-targeted pandemic emergency longer-term refinancing operations, or PELTRO, will be conducted from May 2020.

Further, the ECB will continue its EUR 750 billion new pandemic emergency purchase programme in a flexible manner over time, across asset classes and among jurisdictions.

Moreover, net purchases under the asset purchase programme will continue at a monthly pace of EUR 20 billion, together with the purchases under the additional EUR 120 billion temporary envelope until the end of the year.

The council said it is fully prepared to increase the quantitative easing.

The ECB left the key interest rate, which is the rate on the main refinancing operations, at record low zero, as expected.

The deposit facility rate was kept at -0.50 percent. The marginal lending facility rate was maintained at 0.25 percent.

Official data showed that the currency bloc contracted 3.8 percent sequentially in the first quarter, in contrast to a 0.1 percent rise in the fourth quarter of 2019. This was the biggest fall on record.

At the press conference in Frankfurt, ECB President Christine Lagarde said the economy will contract as much as 12 percent this year. She said the bloc is facing an economic contraction of magnitude and speed that are unprecedented in peacetime.

Carsten Brzeski, an ING economist said the decision to keep all instruments and QE unchanged showed that it first wants to take stock of all recent measures.

"It probably also wants to keep some powder dry. And, this dry powder is needed, as today's GDP data has given us the first impression of how severe the crisis in the eurozone actually is," Brzeski added.


The material has been provided by InstaForex Company - www.instaforex.com

*Euro Drops To 1.0833 Against U.S. Dollar Amid Lagarde Speech

Trading 30 avr 2020 Commentaire »

Euro Drops To 1.0833 Against U.S. Dollar Amid Lagarde Speech


The material has been provided by InstaForex Company - www.instaforex.com

April 30, 2020 : EUR/USD Intraday technical analysis and trade recommendations.

Trading 30 avr 2020 Commentaire »

analytics5eab155d972c3.jpg

Few weeks ago, the EURUSD pair has expressed significant bullish recovery around the newly-established bottom around 1.0650.

The following bullish engulfing H4 candlesticks as well as the recently-demonstrated ascending bottoms indicated a high probability bullish pullback at least towards 1.0980 and 1.1075 (Fibonacci Level 50%).

Key Supply-Levels in confluence with significant Fibonacci levels are located around 1.1075 (50% Fibonacci) and 1.1175 (61.8% Fibonacci) where bearish rejection was highly-expected upon the latest bullish pullback that took place by the end of March.

Thus, the depicted Head & Shoulders pattern was demonstrated around the price levels of (1.1000 - 1.1075).

Further bearish decline was demonstrated towards 1.0800 where the nearest demand level to be considered was located near the backside of the broken channel (1.0800-1.0750).

Recent signs of Bullish rejection have been manifested around the price zone of (1.0800-1.0750) leading to the recent bullish spike up to 1.0990.

The short-term technical bullish outlook remains valid as long as bullish persistence is maintained above the recently-established ascending Bottom around 1.0770.

Further bullish advancement is expected to pursue towards 1.1000, 1.1075 then 1.1175 where 61.8% Fibonacci Level is located.

Despite the recent bearish decline, the price zone of (1.0815 - 1.0775) stood as a prominent Demand Zone which has been providing bullish support for the pair.

On the other hand, Please note that any bearish breakout below 1.0830 or 1.0770 (the recently established bottoms) invalidates the previously-mentioned bullish outlook.

Trade recommendations :

Intraday traders were advised to look for valid short-term BUY trades around the price zone of 1.0815 - 1.0775.

S/L should be advanced to 1.0630 while remaining T/P levels to be located around 1.1000 and 1.1075.

The material has been provided by InstaForex Company - www.instaforex.com

Ireland Retail Sales Fall Most Since 2009

Trading 30 avr 2020 Commentaire »

Ireland's retail sales declined at the fastest rate in more than 11 years in March, data from the Central Statistics Office reported on Thursday.

The retail sales volume decreased 12.7 percent month-on-month in March, following a 1.2 percent fall in February. This was the biggest fall since January 2009.

The value of retail sales fell 13.7 percent monthly in March, following a 0.6 percent decline in the preceding month.

On an annual basis, the retail sales volume fell 11.1 percent in March, after remaining unchanged in the prior month.

On a yearly basis, the value of retail sales decreased 12.4 percent in March, following a 0.2 percent fall in the previous month.


The material has been provided by InstaForex Company - www.instaforex.com