EUR/USD and GBP/USD. United States initiates investigation into the spread of coronavirus by China and prepares to issue

Trading 28 avr 2020 Donner votre avis

4-hour timeframe

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Average volatility over the past five days: 78p (average).

The EUR/USD pair continued to trade higher on the second trading day of the week. A new buy signal has formed from the Ichimoku Golden Cross indicator, which is currently weak, since the pair have not yet overcome the Ichimoku cloud. Thus, the upward movement can continue today and tomorrow with a target on the upper border of the Ichimoku cloud. There was not a lot of news from the US and the European Union during the first two trading days of the week, and there was no news of the economic plan at all. Traders are preparing for the meetings of the Federal Reserve and the European Central Bank, and there is nothing to respond to at this time. Based on the fact that in anticipation of the Fed meeting, which will be summed up tomorrow, the US dollar is becoming cheaper, we can assume that the expectations of traders are negative. At the same time, one can hardly expect anything optimistic from the ECB with its rates of -0.5% - 0.0%.

Meanwhile, in Europe, many countries, including Italy and Spain, the most affected by the pandemic, are preparing to gradually weaken quarantine measures. Starting on May 1, Austria will open shopping centers and beauty salons, a bit later hotels and restaurants will start operating, citizens are allowed to go out in Italy and Spain, and they also launch industry and construction. We have already talked about concessions in America, one of the states - Texas - is opening up, Americans will be allowed to go out, cinemas and shopping centers will open. However, now that the coronavirus epidemic has not retreated, it has at least taken a timeout, the governments of all countries of the world have time to ask questions to China. Actually, US President Donald Trump, who found reasons to quarrel with China out of the blue, said today: "A very serious investigation is underway. We are extremely dissatisfied with the actions of China and this situation. The virus could be stopped before it began to spread around the world, and I am convinced that it should be so. What will happen now, I'll say when the investigation ends. " Thus, it can be clearly noted that Trump will not forgive Beijing for the strongest contraction in the US economy in just a few months thanks to the coronavirus.

At the same time, it was reported that Trump knew about the high risks of the COVID-2019 outbreak in the United States back in January and February. The Washington Post reports that he was given about ten reports, each of which warned of a possible pandemic. In particular, these reports reported that Beijing hides the real scale of the pandemic on its territory, as well as the real number of deaths. Nevertheless, the White House ignored these warnings, and only when more than half a million citizens were infected in the US themselves, did Trump begin to accuse China of hiding information. Now many publications, experts and detractors believe that the US leader is just looking for someone to blame and "extreme" to cover their own miscalculation and mistakes. It is for this reason that Trump attacked the WHO, and also accused China of almost deliberately spreading the epidemic. Legal experts believe that even if any country in the world wants to receive compensation from China, this is unlikely to be feasible, since there are simply no laws in world law that describe a pandemic. However, according to some media reports, Germany has already billed China in the amount of $130 billion. In turn, Trump believes that China owes America a much larger sum. "We are exploring options, and we are talking about much more money than Germany. We have not yet made a final decision," Trump said. It turns out that if China refuses to voluntarily pay multibillion-dollar claims (and there is no doubt that other countries will follow the example of Germany and the United States), then the only thing that remains is to introduce sanctions and trade restrictions against China. Against a country that is one of the largest exporters in the world.

4-hour timeframe

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Average volatility over the past five days: 118p (high).

The GBP/USD pair also continued its upward movement for most of the day on April 28. Thus, the pound sterling has now formed an upward trend. Today, the first resistance level of 1.2494 worked out, which traders could not overcome. Thus, we can already say that a downward correction has begun with the first goal of the Kijun-sen line. If you look at the whole picture for the pair over the past month, it becomes clear that there is no such trend during this period. The pair moves in a channel 450 points wide. Thus, perhaps this is precisely the consolidation that we mentioned earlier. The pound did not manage to recover to the pre-crisis levels, so this currency retains the growth prospects. But at the same time, it is impossible to predict where the market will move in the near future, given that traders continue to ignore any macroeconomic events. Perhaps everything will change tomorrow, when the results of the Fed meeting are summed up. Nevertheless, market participants have calmed down recently, volatility indicators are already acceptable. There is hope that important events such as the Fed meeting will work out again.

Meanwhile, nothing interesting happens in the UK itself. Coronavirus continues to spread, launching at a slower rate than before. British Prime Minister Boris Johnson says it's not the time to quarantine. The total number of patients is already 158,000. The UK can surpass Germany and France in this indicator within just a week.

Recommendations for EUR/USD:

For short positions:

The EUR/USD continues a not-so-confident upward movement on the 4-hour timeframe. Thus, sell orders can again be considered not before you consolidate the price below the Kijun-sen line with the first targets of 1.0750 and 1.0733.

For long positions:

Long positions are formally relevant at this time, but we would advise not to take risks and wait until you overcome the Ichimoku cloud and only then should you start trading to increase the second resistance level of 1.0985 with the first goal.

Recommendations for GBP/USD:

For short positions:

The pound/dollar is also continuing an upward correction. Thus, traders are advised to return to selling the British currency with the goal of a volatility level of 1.2308 not before consolidating the pair below the critical line.

For long positions:

Purchases of the GBP/USD pair are also formally relevant now, however, quotes have rebounded from the level of 1.2494, so now it is very likely the beginning of a downward correction.

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

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