EUR/USD. Donald Trump will try to postpone or cancel the election.

Trading 23 mai 2020 Commentaire »

24-hour timeframe

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Another trading week on the Forex market has ended. During this week, the EUR/USD pair failed to exit the side channel, limited by the levels of 1.0750-1.0990. Quotes worked out the upper limit of the channel and rebounded, so now a downward movement to 1.0750 is expected. On a 24-hour timeframe, the side channel is particularly visible. Over the past week, nothing has changed for the euro/dollar pair. Traders still lack motivation and desire for a new trend, as it implies a strong rise in the price of one of the currencies. And there are no fundamental reasons for this. The US and EU economies are simultaneously declining and it is impossible to predict which of them will eventually lose more. The monetary policies of the Fed and ECB are almost identical, with both central banks pouring in multibillion-dollar and even trillion-dollar tranches to support businesses and consumers. Thus, neither the dollar nor the euro currency has an advantage now.

The last trading day of the week ended without any excesses. Following the technical picture, the euro/dollar quotes continued to fall. At the same time, the theme of Donald Trump's re-election to a second term is becoming a key topic almost all over the world. By and large, the situation for the whole world looks like this. If Trump is re-elected, it will mean that trade wars and general destabilization around the world will continue. It is because the American President, who is always dissatisfied with the way other countries treat America, will continue to foment conflicts, fully adhering to the postulate: "Peace is war, war is peace", described by George Orwell in the "1984" novel. Moreover, after what China did to the United States (in fact, with the whole world, but Donald Trump believes that it is with the United States), infecting them with a "coronavirus" that has already claimed the lives of more than 90,000 Americans and infected more than 1.5 million, Trump will seek revenge. After all, the matter is for the US leader, who also "lost five acquaintances from the virus," not even in people, but in the fact that the country's economy suffered a crushing blow while the Chinese economy got off with a slight startle and was already beginning to recover. Either China was ready for an epidemic, or the Chinese authorities took the pandemic very seriously and immediately localized the infection with the help of "draconian" quarantine. It doesn't matter now. It is important that due to the epidemic, quarantine, and the resulting crisis, the US economy continues to decline, and the Chinese economy will continue to grow by the end of 2020, according to experts' forecasts, and will add 1.2%. And of course, it's about personal ambition. After all, it turns out that the one against whom Trump has been fighting for the past two years, and struck back at him, from which the entire country will recover in at least a year (and even then in the best case), and this blow may cost Trump the presidential chair.

Trump himself is confidently optimistic in public and exudes confidence that he will be re-elected for a second term although China supports Joe Biden, and Barack Obama and all the Democrats opposed him back in 2016 and may repeat this feint in 2020. However, political ratings do not lie. They say that it is Joe Biden who will become the new President of the United States. Moreover, various simulations show that the results of the vote in November can become disastrous for Trump. And all because of the coronavirus and the crisis. Based on all this, the President of the United States has two possible options. And they can be implemented in parallel with each other. The first plan of action involves the maximum possible denigration of "all the enemies of America" (that is, opponents of Trump). And this list includes WHO (it was supportive of China and failed to confront the epidemic in its early stages), China (as the source of the epidemic, which misinformed the entire world in the early stages of the pandemic, which led to the infection of the entire world), Joe Biden (supports China, and China supports him), Barack Obama (led the campaign to prevent Trump from becoming President in 2016), all the Democrats (who set up a "witch hunt", impeach Trump and just don't like him at all). Trump's task is to make American voters believe that he is personally not to blame. The above-mentioned people and countries are to blame. He, as the president of the United States, on the contrary, did everything possible so that the number of victims was not in the millions. The second plan of action will be to try to postpone the election. By the way, this was stated by Trump's rival Joe Biden in April. According to Biden, Trump will do everything possible to prevent the elections in November, since he is unable to hold a large-scale election campaign due to the quarantine, and his election speeches have been greatly reduced due to the consequences of the epidemic (high unemployment, a weak labor market, a drop in GDP). The same opinion is held by some mass media and periodicals. "The US President will not be afraid to use the coronavirus as a reason for postponing the election, given the depth of the political hole that he dug for himself," said the Fox News channel, which is traditionally loyal to Trump.

Thus, many experts believe that the Trump administration will wait for the fall to assess its chances and ratings for re-election and only after that it will launch "Plan B" with the cancellation or postponement of the election. Donald Trump himself has repeatedly stated ironically that he is ready to become the President of the United States for life... or to remain in office as president "five years, nine years, 13 years, 17 years, 21 years, 25 years, 29 years". The media estimated that this joke was used by Trump at least 20 times over the past 3.5 years. Trump also admired Chinese leader Xi Jinping after the Communist Party of China abolished the rule that a president cannot be elected for more than 2 terms. "I think it's great. Maybe we should try to do it sometime," Trump commented.

What are the actual options for Trump? According to US law, only Congress can postpone the election date, and the Democrats have a majority in the House of Representatives. So it won't even get to the Senate vote, where the Republicans already have the majority. Moreover, the law sets the exact date of the vote, as well as the date when the President must leave the office. Thus, even if the vote does not take place, Trump will still have to leave the office on January 20, 2021. However, experts and political analysts are already saying that certain "feints" at the disposal of Trump and his team still exist. For example, on election day, states controlled by Republican governors may be quarantined due to the "coronavirus" epidemic. This is especially true in districts that traditionally vote for Democrats. There will be no quarantines in polling stations that vote for Republicans. So the election can be held, but Joe Biden may not count a decent number of votes. In any case, Trump will not just give up, there is no doubt about it.

Trading recommendations:

On the 24-hour timeframe, the euro/dollar pair continues to consolidate in the side channel. Since there was a rebound from the upper border of the channel, now traders can trade for a decrease with goals around the level of 1.0750. Overcoming the lower border of the channel will notify that the consolidation process is complete and the EUR/USD pair can start forming a new downward trend.

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

Dollar Exhibits Strength

Trading 23 mai 2020 Commentaire »

The U.S. dollar exhibited strength against its peers on Friday amid weak data from Europe and China's decision to not publish its growth target for the year.

An escalation in tensions between the U.S. and China after the latter said it is planning a new Hong Kong national-security law

The dollar index, which rose to 99.87, was last seen moving around 99.75, gaining nearly 0.4% over previous close.

The Euro was weaker at $1.0901, giving up nearly 0.5%. The European Central Bank's April meeting showed the bank was "fully prepared" to provide even more stimulus as soon as June, in an attempt to support the economy amid the coronavirus pandemic.

The British Pound Sterling weakened to $1.2170 from Thursday's close of $1.2220. Sterling was reacting to UK retail sales data and a report showing the country's budget deficit to have widened to a record high.

retail sales volume in UK declined 18.1% in April. That was the biggest monthly fall on record. Economists had forecast sales to decrease 16% after falling 5.2% in March.

Against the Japanese currency, the dollar was little changed with a unit fetching 107.61 yen.

The Aussie was trading at US$0.6539, down from previous close of $0.6565.

Against Swiss franc, the dollar was up marginally with a unit fetching CHF 0.9714, compared with CHF 0.9705 Thursday evening.

The Loonie was weaker at 1.3991 a dollar, retreating from 1.3955, weighed down by weak retail sales data.

The Chinese currency Yuan weakened to 7.1304 a dollar, losing ground from 7.1154 after the Chinese government dropped setting economic growth target for the first time and placed job creation as top priority as coronavirus, or Covid-19, pandemic has ravaged the outlook.

At the annual session of the National People's Congress in Beijing, Premier Li Keqiang said the country will face some factors that are difficult to predict in its development due to the great uncertainty regarding the Covid-19 pandemic and the world economic and trade environment.

Meanwhile, China's decision to write a new national security law into Hong Kong's charter has triggered fresh worries on U.S.-China relations.

Republican and Democratic U.S. Senators said on Thursday that they would introduce legislation to impose sanctions on Chinese officials involved in enforcing proposed security laws in Hong Kong.

The legislation would also impose secondary sanctions on banks that do business with entities found to violate the law guaranteeing Hong Kong's autonomy.

The aggressive intent of the Congress with regard to the tone on China is due to China's alleged role in covering up the initial stages of the coronavirus outbreak.

In another development, the U.S. Senate passed legislation that seeks to delist Chinese companies who don't abide by U.S. accounting laws.

China has warned that it will safeguard its sovereignty, security and interests, and threatened countermeasures.


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

Crude Oil Futures End Sharply Lower

Trading 23 mai 2020 Commentaire »

Crude oil prices drifted lower on Friday as concerns about outlook for energy demand resurfaced due to rising tensions between the U.S. and China over the Hong Kong issue.

The Chinese government's decision that it will not publish an annual growth target due to uncertainties amid the coronavirus pandemic also weighed on crude oil prices.

Output reductions by OPEC and allies, and data from Baker Hughes showing another drop in oil rig count in the U.S. helped limit oil's slide.

West Texas Intermediate Crude oil futures for July ended down $0.67, or about 2%, at $33.25 a barrel.

Brent crude futures ended down $0.93, or 2.58%, at $35.13 a barrel.

WTI crude futures gained almost 13% in the week, its fourth weekly uptick.

At the annual session of National People's Congress in Beijing, Premier Li Keqiang said the country will face some factors that are difficult to predict in its development due to the great uncertainty regarding the Covid-19 pandemic and the world economic and trade environment.

In political news, China's decision to write a new national security law into Hong Kong's charter has triggered fresh worries on U.S.-China relations.

Republican and Democratic U.S. Senators said on Thursday that they would introduce legislation to impose sanctions on Chinese officials involved in enforcing proposed security laws in Hong Kong.

The legislation would also impose secondary sanctions on banks that do business with entities found to violate the law guaranteeing Hong Kong's autonomy.

The agressive intent of the Congress with regard to the tone on China is due to China's alleged role in covering up the initial stages of the coronavirus outbreak.

According to Baker Hughes, the number of active U.S. rigs drilling for oil dropped to 237 this week, down 21 from previous week.

The total rig count has also dropped by 21 this week to 318.


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

Treasuries Move Modestly Higher Amid Concerns About U.S.-China Tensions

Trading 23 mai 2020 Commentaire »

After ending the previous session nearly unchanged, treasuries moved modestly higher during the trading day on Friday.

Bond prices gave back some ground after an initial jump but managed to remain in positive territory. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, dipped 2 basis points to 0.657 percent.

The uptick by treasuries came amid concerns about rising tensions between the U.S. and China, as Beijing moved to strengthen control over Hong Kong with new security laws.

U.S. President Donald Trump warned that Washington would react "very strongly" if China follows through on its plans.

The latest developments come after the Senate passed a bill on Wednesday that would potentially delist Chinese stocks from U.S. exchanges.

In other China-related news, the Chinese government abandoned setting an economic growth target for the first time amid uncertainties posed by the coronavirus pandemic.

Trading activity was relatively subdued, however, with a lack of major U.S. economic data keeping some traders on the sidelines.

The upcoming Memorial Day holiday also contributed to the light trading, with some traders looking to get a head start on the long weekend.

Following the holiday weekend, next week's trading may be impacted by reaction to reports on new home sales, consumer confidence, durable goods orders, pending home sales, and personal income and spending.

Bond traders are also likely to keep an eye on the results of the Treasury Department's auctions of two-year, five-year, and seven-year notes.


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

Gold Futures Settle Modestly Higher

Trading 23 mai 2020 Commentaire »

Gold prices climbed higher on Friday as traders sought the safe-haven asset amid an escalation in tensions between the U.S. and China, and concerns about global growth.

The dollar too firmed up nicely, and its uptick limited gold's gains a bit.

The dollar index rose to 99.87 and was last seen at 99.77, up 0.4% from previous close.

Gold futures for June ended up $13.60, or about 0.8%, at $1,735.50 an ounce, after rising to a high of $1,742.00 intraday.

On Thursday, gold futures for June ended down $30.20, or 1.7%, at $1,721.90 an ounce.

Gold futures shed about 1.2% in the week.

Silver futures for July gained $0.329, or 1.9%, to $17.693 an ounce, while Copper futures for July closed lower by $0.0455, or 1.9%, at $2.3865 per pound.

The Chinese government abandoned setting economic growth target for the first time amid uncertainties posted by the coronavirus pandemic.

On the political front, China's decision to write a new national security law into Hong Kong's charter has triggered fresh worries on U.S.-China relations.

Republican and Democratic U.S. Senators said on Thursday that they would introduce legislation to impose sancions on Chinese officials involved in enforing proposed security lwas in Hong Kong.

The legislation would also impose secondary sanctions on banks that do business with entities found to violate the law guranteeing Hong Kong's autonomy.

The agressive intent of the Congress with regard to the tone on China is due to China's alleged role in covering up the initial stages of the coronavirus outbreak.

In another development, the U.S. Senate passed a legislation that seeks to delist Chinese companies who don't abide by U.S. accounting laws.

China has warned that it will safeguard its sovereignty, security and interests, and threatened countermeasures.


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